Is the Precious Metals Pullback Over? What's Next for Gold and Silver

Over the past couple of weeks, the precious metals market has experienced a routine and healthy pullback, leaving many investors wondering if it's nearing completion or has further to go. In this update, we'll take a closer look at the current state of gold and silver, and examine important intraday chart patterns that provide strong clues about what might come next.

Gold's Pullback: A Healthy Correction or Something More?

After being strongly overbought throughout September and the first half of October, gold's pullback in the second half of October helped to work off that overbought condition and the frothy sentiment that came with it. According to the Williams %R indicator, gold is now positioned to resume its ongoing bull market, which remains intact and has many years left to run.

Key Takeaways:

• Gold's pullback has helped to work off its overbought condition

• The Williams %R indicator suggests gold is now positioned to resume its bull market

• Volatile conditions are subsiding, indicating a new consolidation phase

Consolidation and the Next Move Higher

The current setup is similar to what occurred in the spring, when a sharp rally was followed by a subsidence in volatility and a period of sideways movement. However, given the brief nature of the recent rally, it's unlikely that another four months of consolidation is required this time. This consolidation should help gold conserve and build energy for its next move higher, which is expected to take it to $5,000 in 2026. Major institutions, including Goldman Sachs, Bank of America, HSBC, and Société Générale, share this outlook.

What's Next for Gold?

Gold is officially oversold within an uptrend, which is typically a bullish signal. However, there's one more development to watch: a consolidation pattern is currently forming on the 2-hour intraday chart. If it breaks lower, that should mark a final quick flush that hits sentiment and sets the stage for a strong rebound. On the other hand, if the recent pullback is already complete, an upside breakout with a convincing close above the key $4,000 level would indicate that the uptrend is resuming.

Stay Ahead of the Curve

As always, our motto is: don't predict, react. Stay up-to-date with the latest market analysis and insights to make informed investment decisions. If you're looking to stay ahead of the curve and capitalize on the next move in precious metals, learn more about our expert analysis and guidance.