Key Concepts
- Dogee Candle: A candlestick pattern indicating market vulnerability after a large intraday price swing.
- Measured Move: A technical analysis technique projecting potential price targets based on the initial price movement.
- Topping Tail: A bearish candlestick pattern signaling potential resistance and a possible price reversal.
- Risk Asset vs. Hedge: Understanding how gold and silver are currently being traded (as risk assets seeking gains) versus their traditional role as a hedge against inflation.
- Inflationary Pressures: Rising prices across various commodities (oil, copper, cattle, wheat) indicating broader inflationary trends.
- CPI & PPI: Consumer Price Index and Producer Price Index – key economic indicators used to measure inflation.
Gold & Silver Intraday Volatility and Commodity Outlook
Gareth Soloway begins by highlighting the extraordinary intraday price swings recently observed in gold and silver, describing action “unbelievable…that hasn’t been seen in decades.” Gold experienced a dramatic move, trading as high as $5600 before collapsing to $5100 and stabilizing around $5300. This volatility is attributed to excessive leverage within the gold market, similar to what is often seen in cryptocurrency trading, where overleveraged positions are liquidated during rapid price declines. Soloway emphasizes this isn’t necessarily a sign of diminished demand for gold, but rather an indication of excessive risk-taking by traders.
He notes the significance of institutional involvement coinciding with the market open, observing gold’s initial trading around $5550 followed by a 10% drop within an hour – an unusual occurrence for gold. He argues that these price movements reflect underlying issues within the US economy, including debt concerns, strained international relations, and Federal Reserve policy. He reveals his own long-term investment in gold, beginning in 2017-2019, as a protective measure against these potential economic risks, a sentiment now shared by a wider audience. Jerome Powell’s recent acknowledgement of a potential future currency collapse further supports this perspective.
Soloway introduces the concept of a “measured move” in technical analysis. This involves projecting a potential price target by extending the initial price movement from the breakout point. He demonstrates this on the gold chart, noting that the current price action remains within the range defined by this measured move. He stresses the need for further confirmation signals before definitively concluding a top has been reached.
Silver’s Technical Signals
Turning to silver, Soloway points to the presence of a “topping tail” candlestick pattern. This pattern, characterized by high volume at the highs, a long upper tail, and a close in the lower 25% of the candle’s range, suggests potential resistance. However, he clarifies that a daily close above the high of this candle would negate the topping tail signal. Currently, silver has fallen back below that level, reinforcing the bearish signal.
Despite his long-term bullish outlook on precious metals, Soloway acknowledges the importance of short-term trading analysis. He emphasizes that charts, regardless of the asset (Apple, Bitcoin, gold, silver), provide valuable insights into potential price movements. He cautions that signals can fail, referencing previous instances where silver topped but subsequently reversed, but notes this current topping tail remains intact and warrants attention. He anticipates a potential pullback of 20-30-40% on silver, potentially back to $75 or lower.
He observes a correlation between the stock market sell-off, Bitcoin’s decline, and the simultaneous drop in gold and silver prices, indicating that these metals are currently being treated as risk assets rather than traditional hedges.
Oil and Broader Commodity Inflation
Soloway identifies oil as his “favorite play for early 2026,” highlighting its significant underperformance relative to inflation. He argues that, considering inflation over the past 10-15 years, oil should be trading around $100 per barrel, though he anticipates a move towards $80. This increase, he believes, will have significant inflationary implications.
He expands the discussion to include other commodities, noting new all-time highs in copper (though currently retracing), a 15% increase in oil since January, and substantial gains in silver, palladium, and platinum. He also points to a 10% rise in live cattle prices, referencing Trump’s trade deal with Brazil aimed at lowering meat prices, which proved temporary.
He emphasizes the undeniable presence of inflation across multiple commodity markets, stating, “There is no doubt there is inflation.” He expresses concern that if the January CPI (Consumer Price Index) and PPI (Producer Price Index) numbers do not reflect an uptick in February, it would raise questions about the accuracy of reported economic data. He asserts that the price increases in commodities are difficult to conceal.
Finally, he notes a recent uptick in wheat prices, with a 7% increase since the beginning of January, suggesting a potential breakout and the possibility of a broader inflationary cycle, particularly in the context of a potential change in Federal Reserve leadership in May or June.
Conclusion
Soloway’s analysis highlights significant volatility in gold and silver, driven by excessive leverage and reflecting underlying economic concerns. While maintaining a long-term bullish outlook on precious metals, he stresses the importance of short-term technical analysis and risk management. He identifies oil as a promising investment opportunity for 2026, driven by inflationary pressures and its historical underperformance. The broader commodity landscape reveals widespread price increases, indicating a growing inflationary environment that warrants close monitoring, particularly as economic data is released and potential shifts in Federal Reserve policy occur. He concludes by emphasizing the difficulty of concealing the rising prices of commodities, suggesting a potential for a more significant inflationary cycle.
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