There has not been much use writing about the precious metals rally lately because, why add to the noise? The time for making noise was back in the spring when the / ratio topped (Silver/Gold bottomed) and we prepared for a stronger rally in the precious metals, this time led by silver, and also including the wider “inflation trades”. Now we look ahead in a very different way.
Silver
Movie poster for ’Superstar: Dare to Dream’ featuring a woman in a schoolgirl outfit and a man in a blazer, both striking a dramatic pose.
Let’s start with the superstar of the rally. Silver has gone vertical and on Wednesday ticked our long-term target of 92. This was based on measurement of the giant, decades-long Cup as the silver price finally broke above the rim in the 50 area and well, boy did it break.
The fundamentals have been broadcast far and wide. These include increasing industrial use in many different areas, from Medical Equipment to Clean Energy (although the solar industry is now seeking to employ less expensive alternative materials).
Oh, and there is silver’s utility as gold’s little brother in the monetary realm. It is on the US list of critical minerals and thought of by many as money.
A masked cowboy holding the reins of a white horse, wearing a grey shirt and a wide-brimmed hat, set against a western-style backdrop.
Good stuff. But corrections happen and silver’s vertical drive to target ripens it for just that, a correction coming either sooner or later. With the silver price at target, I took puts on the Silver Bullet (SLV) a couple days ago and dated them out to March in the likely event that I am wrong on timing. I still hold several precious metals positions, so this can act as a balance in the coming weeks.
A vertical move like this, no matter the fundamentals, is not sustainable. When it finally blows out under a combination of its own waning momentum, industries using alternative materials, and the pressure of trading authorities like CME Group raising margin requirements, the pullback is likely to be appreciable. Indeed, not a pullback at all. A savage correction is more likely.
As noted above, the target is in, the price is vertical and it is important to realize that the price is not just driven by global stackers collecting and storing their bars, or industries consuming the metal. The pure momentum is stoked heavily by the speculation in the futures and digital markets. Don’t think otherwise. It’s those momentum players and FOMOs that will need to be flushed at some point.
Silver’s monthly chart:
A financial chart showing the historical price of silver with key patterns labeled, including ’A Cup’ and ’B Cup’, alongside indicators of overbought conditions and support levels.
Beyond a coming correction, the macro is supportive (for all the reasons we’ve put forward over the last year, beyond the scope of this article). Personally, I don’t think the next post-spike correction will lead to a long bear market as happened in both 1980 and 2011. But it will probably feel like a bear market to those not prepared.
Of course, it is not just silver. As we have noted, palladium and platinum seem to follow silver and they have been doing that of late. So have many markets in the critical commodities/resources areas. Even mainstream metal copper has been getting the “critical metals” bid.
Much of 2025 was like a roundup. We speculator cowboys lassoing “critical minerals” dogies for fun and profit. Yee-haw! This will also be temporarily but rudely interrupted when or after silver finally takes its correction.
Gold
Meanwhile, gold is likely to get hit too. But not nearly to the degree of its impetuous little brother. When a disinflationary phase gets heavy enough, it should crack the “inflation trades”, which will see silver and many other commodities/resources drop harder than gold. That could also see the US dollar rise in a rally counter to its ongoing bear market.
Gold’s monthly chart has also gotten very extended, technically. That is obvious.
Line chart depicting gold prices from 2001 to 2026, highlighting a bullish trend with a cup pattern and price targets labeled at 3000+. The chart includes indicators for potential support and resistance levels.
However, in the big picture macro gold is… well, let the chart tell you:
Chart Comparing Gold/SPX, Silver/SPX, and HUI/SPX ratios over time, illustrating historical fluctuations and trends.
Gold, silver and the miners/royalties likely have a long way to go on the big picture. As you can see, silver has gotten peppy, even in relation to the bloated S&P 500. That should be tamped down. Gold and gold stocks are only beginning an era of out-performance when considering a big picture view.
The Gold/Silver ratio is diving to an extreme. While we are managing a slightly lower level in NFTRH, risk of reversal is high. That risk, especially if accompanied by a rallying US dollar would bring the corrective pain. It’s important to note that we, NFTRH, called the bottom in the Silver/Gold ratio (top in Gold/Silver) back in the spring. So I am not talking any book other than the one that is needed at this time. No “perma” views.
The above indications of risk are the very pictures of “buying opportunity” when a correction does come. It will require patience and weekly perspective review/adjustments.
To drill down deeper into the internals of many markets please refer to our Indicator Charts page (including the live version of the chart above and many others), which can be accessed any time and allows you to view what is going on inside the markets. These charts provide important clues about market leadership and future direction, assisting in allocating/balancing/rebalancing successfully with the market’s internal gyrations.