Is the Precious Metals Pullback Over?

Gold and silver are oversold, but it’s important to watch the latest consolidation pattern forming on the intraday charts to see whether another quick flush is next or if a rebound is ready to begin.

Over the past couple of weeks, I’ve been writing updates tracking the routine and healthy pullback in precious metals and mining stocks to determine whether it has further to go or is nearing completion. In my last update on October 28th, I noted that both precious metals and mining stocks had become oversold, which, in the context of a confirmed uptrend like the one we’re currently in, typically signals that the pullback is close to ending and usually offer a good opportunity for dip buyers and those looking to dollar-cost average (learn more). In today’s update, I want to show where gold and silver stand now, along with important intraday chart patterns that provide strong clues about what might come next.

Let’s start with gold, which leads the overall precious metals space. After being strongly overbought throughout September and the first half of October, according to the Williams %R indicator below the price chart, gold’s pullback in the second half of October helped to work off that overbought condition and the frothy sentiment that came with it. This now positions gold to resume its ongoing bull market, which remains intact and has many years left to run. That said, before calling the pullback over, I want to see how a specific intraday chart pattern resolves, which I will show shortly.

After a surge in volatility during the gold rally in September and early October, as measured by the Bollinger Band Width indicator beneath the price chart, volatility is now subsiding in gold and across the broader precious metals complex (learn more). This indicates that precious metals are likely forming a new consolidation phase as they build energy for the next major move.

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, I don’t necessarily believe that another four months of consolidation is required this time, given how brief the recent rally has been.

This consolidation should help gold conserve and build energy for its next move higher, which I expect will take it to $5,000 in 2026. That outlook is shared by major institutions including Goldman Sachs, Bank of America, HSBC, and Société Générale. In addition, JPMorgan CEO Jamie Dimon, who is not known for being a gold advocate, recently said that gold “could easily go to $5,000 or $10,000 in environments like this.”

Gold is officially oversold within an uptrend, which is typically a bullish signal, but there’s one more development I want to see play out first. A consolidation pattern is currently forming on the 2-hour intraday chart, labeled “Consolidation #2” on the chart below. On October 26th, I pointed out “Consolidation #1” and noted that it could break in either direction, and it ended up breaking to the downside.

I’m now watching to see how this second consolidation resolves. 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, I would expect an upside breakout with a convincing close above the key $4,000 level, which would indicate that the uptrend is resuming. As always, my motto is: don’t predict, react.