Oct 27, 2026
1. Gold and fiat enthusiasts alike are struggling to find explanations for this year’s rally for fiat and the dip for gold. Rising oil, rising rates, margin calls, a loss of central bank buying momentum, new import duties in India…
2. These are all factors at play, but ultimately what matters most is that gold is a currency that surged from a price of about $2000 to $5600 without a meaningful consolidation of the move.
3. The consolidation is in play this year, and it’s natural for investors to want to know when the next big move higher begins, but a lot of what drives gold’s biggest moves… comes as a major surprise.
4. The bottom line is that for gold, savvy analysis is exciting, but nowhere near as helpful as patience.
5. In a nutshell, just as a child waits excitedly to find out what presents lie under the Christmas tree, gold needs to be treated the same way:
6. It’s the world’s greatest financial item and the general price drivers are well-known, but exactly which scenario drives gold to new and glorious heights against fiat… is perhaps best viewed as the world’s most awesome surprise.
7. The fiat rally looks relatively pathetic and when it ends another significant decline is near-certain to occur.
8. While the exact scenario that creates the next collapse of fiat against gold will be a surprise, there are intermediate-term opportunities that do present themselves and these can produce significant gains for investors…
9. In a very fast timeframe.
10. The timeframe is typically 1-2 months for massive gains for gold stocks and silver bullion, and on that exciting note…
11. Gold stock and silver bullion enthusiasts should be modest buyers here, in anticipation of a 20%+ surge in prices over the coming 1-2months.
12. It’s not a big buy zone, but it is one. Note Stochastics (14,5,5 series) at the bottom of the chart. The lead line has moved to the oversold zone at the same time as gold has arrived at the important support created by the previous $3941 area low.
13. A 50% retracement of an enormous move is common for gold. In the current situation, a retracement of the move from $2000 to $5600 would put gold at about $3800.
14. That key Fibonacci marker sits between support of $3941 and $3500, and it enhances the entire $4000-$3500 area as a “must-buy” zone for both gold stock and silver bullion investors.
15. These items are highly leveraged to gold; a 10% surge in the price of gold often sees both silver and gold stocks surge 20%-25%... and sometimes much more!
16. The inverse H&S pattern may or may not play out exactly as indicated, but it’s still bullish technical action.
17. The last buy zone (July-August) saw GDX rally about 40% in a month. Annualized, that’s almost 500%.
18. After forming a loose double top pattern, leg 1 featured a panic-oriented decline.
19. Leg 2 typically is a “slope of hope”, and that was the case here. Note that I’ve highlighted the ensuing rallies in red; they were violent and more indicative of short covering than sustained buy programs.
20. The third leg (the current one) typically involves significant investor demoralization and that’s in play now.
21. When the next rally begins (hopefully from about here), if it marks the end of the year 2026 consolidation, it will have a gentler slope that is indicative of institutional commitment to the sector… a sector that at $4000 gold is outrageously undervalued.
22. What about silver? There’s a massive bull wedge in play and a Fed/PCE report driven move under the “big” round number of $50 would almost certainly complete the white flag hoisting phase for most amateur silver bugs.
23. For the pros, this is just another day at the buy zone office; it’s realistic to anticipate a 20% gain in a month or two from what ultimately becomes the newest “rally time” marker on the chart.
24. Double-click to enlarge this stunning news excerpt about Chinese citizen demand for gold. In the West, wildly leveraged gamblers place childish bets on Fed hikes and government inflation reports. In contrast, in the wisdom-themed East, mandatory delivery contracts are fast-becoming the most exciting way to invest in gold, with hundreds of tons of gold apparently purchased in the past week alone. The bottom line: This is a buy zone, and it’s time for all gold bugs to board this fabulous bull era train!
