Precious metals have experienced a historic bull run over the past few years. This trend continued into the first month of 2026, with gold climbing to a record high of $5,600 in late January. That move was particularly impressive considering the price doubled in a single year!
But prices rarely go straight up or straight down for long, and major moves like this typically are followed by profit-taking and consolidation. So, it is not too surprising to see that the gold price has been trending lower for four months since this peak. The price briefly dropped to $4,100 before bouncing to $4,538.
The chart shows the powerful move higher in 2025 and the acceleration of the bullish trend into the first month of 2026. We have since seen a series of lower highs and some sideways trading, suggesting that an interim bottom may be near.
Key support is at the blue shaded horizontal line, which aligns with the 200-day exponential moving average at $4,362. I expect this support to hold, implying up to 3.8% of additional downside. If this support fails, there is very strong support around $4,250 to $4,300 at the bottom leg of the asymmetric triangle pattern.
The RSI momentum indicator had pushed toward 90 during the January peak, but then dropped to below 30 and has since settled at 45. This reset in momentum sets gold up for another major push higher in the months ahead. This next breakout is likely to occur before the triangle is resolved, or by the first week of August at the latest.
While the move higher in the gold price was impressive, it pales in comparison to what the silver price has done. It took a little longer for silver to get going, but once it started moving, the gains were explosive.
From late January of 2025 to late January of 2026, the price of silver rose from $30 to $121, roughly a 4x! Similar to gold, the exponential move higher was followed by a sharp pullback and consolidation. The silver price currently trades around $75 per ounce, but is showing signs of bottoming, with multiple higher lows in recent months.
Silver’s symmetrical triangle pattern also suggests an end to the consolidation by early August. I expect the price to return to three digits by the end of the year and think the current price is an excellent opportunity for investors to buy the dip.
Key Factors that Will Push Gold and Silver Higher Again in 2026
1. Persistent Central Bank Buying (Structural Demand Floor)
Central banks (especially in emerging markets like China, India, Poland, and Turkey) bought ~800–860 tonnes in 2025 and are expected to continue at a similar or higher pace in 2026.
Motivations: De-dollarization, reserve diversification, geopolitical hedging, and reducing reliance on USD assets. 95% of central banks surveyed expect global gold reserves to rise.
This creates steady, price-insensitive demand that offsets weaker periods in jewelry or retail buying.
2. Geopolitical Risks and Safe-Haven Demand
Ongoing conflicts (Middle East tensions, Ukraine, broader fragmentation) and policy uncertainty drive flight-to-safety flows.
Gold benefits as a neutral, politically independent asset. Escalations or prolonged uncertainty could trigger sharp investment surges (ETFs, bars/coins).
3. Lower Real Yields / Fed Rate Path and Weaker Dollar
Expected Fed easing (or even just pausing hikes) reduces the opportunity cost of holding non-yielding gold.
A softer USD (common in easing cycles) makes gold cheaper for foreign buyers. Every 50 bps of easing can add meaningful support (~$120/oz, according to some estimates).
4. Inflation, Debt, and Currency Debasement Concerns
Sticky inflation (energy-driven from conflicts), massive government debts, and long-term fiat concerns fuel the “debasement trade.”
Institutional investors increasingly view gold as both portfolio insurance and a hedge against sovereign debt sustainability risks.
5. Investment Demand Recovery (ETFs & Private Sector)
Record ETF inflows in 2025; outflows during the recent pullback are seen as temporary. Renewed inflows expected on any macro softening or risk-off moves.
Physical investment in Asia and Western markets remains supportive.
While most of these factors also benefit silver, it offers greater leverage from industrial demand (solar, EVs, AI/electronics) alongside monetary appeal, resulting in structural deficits.
Silver has been in a persistent structural deficit since 2021, marking its sixth consecutive year in 2026. This means total demand (industrial, investment, jewelry, etc.) has consistently exceeded total supply (mine production + recycling) for this period.
The 2025 silver deficit is approximately 40.3 million ounces (Moz). The 2026 forecast is for the deficit widening to 46.3 Moz (up ~15% year-over-year), according to the Silver Institute and Metals Focus (World Silver Survey 2026).
The blue lines are total silver demand, and the grey lines are total supply. Economic law dictates that when demand outstrips supply, prices rise.
Since 2021, the market has pulled 762 million ounces from above-ground stocks to bridge the gap. This has no modern precedent and has significantly reduced visible inventories, increasing vulnerability to price squeezes.
Overall Outlook Context
Analysts (J.P. Morgan, Goldman Sachs, etc.) see gold pushing toward $5,000–$6,300/oz by end-2026, with some longer-term targets even higher. The recent dip is widely viewed as a buying opportunity within a structural bull market, not a trend reversal.
Risks to watch include a stronger-than-expected US economy/dollar, delayed rate cuts, rapid geopolitical de-escalation, or demand destruction from high prices.
But I view the upside potential as significantly larger than the downside risk. The bullish drivers are largely structural rather than cyclical, giving gold and silver strong underlying support for the next year. The pullback has improved risk/reward for both physical gold/silver and mining stocks (which typically offer leveraged upside).
Buying the dip in gold, silver, and especially mining stocks can be a high-reward strategy in a structural bull market, but it comes with amplified volatility, operational risks, and the need for selectivity. I advocate for holding a mixture of physical metals and mining stocks.
At Nicoya Research, we have started increasing exposure in our Gold Stock Bull portfolio on the dip. We cover mostly mid-cap gold and silver mining stocks, but have diversified the portfolio with exposure to copper, lithium, rare earths, and energy. Several of our positions are up double digits over the past week, and our portfolio consistently outperforms the major gold mining stock ETFs.
Cheers,
Jason Hamlin
Founder, Nicoya Research
