Hey trader,
Let’s rewind to January of this year. Gold and silver were fresh off one of their best years in history.
Everyone was throwing around upside targets in both metals. Then they peaked right on schedule.
Silver is now down more than 50% from its all-time high of $121.78. Gold is down almost 30% from its own record.
This gold and silver correction has pushed both metals well off their highs. With a little over two months left in 2026, almost nobody has anything positive to say about them. I’m starting to get interested again.
I’ll walk you through why the gold and silver correction started when it did and what’s been weighing on metals since. You’ll also see the catalyst I’m watching into year-end and the levels that will tell you when it’s time to act.
The timing of this year’s top says a lot about how this market thinks. So let’s start there.
How The Gold And Silver Correction Began Before The Conflict
Gold and silver peaked a full month before geopolitical hostilities escalated to another level. That’s the crazy thing about this top.
The metals didn’t wait for the headlines. They priced in the conflict ahead of time.
Once the conflict actually kicked off, the move had already happened. It turned into another case of “buy the rumor, sell the news.”
The selling since then has followed a familiar script for a gold and silver correction. Silver dropped below its July lows. Gold is still holding above its lows from June.
This is classic gold and silver correction behavior. Silver drops more than gold on the way down.
It’s the same dynamic you see during real precious metals bull markets. Silver outperforms gold to the upside, then gives back more when the trend turns.
Drawdowns like this aren’t new. The gold and silver correction that followed the 2011 peak ran far deeper than this one.
Gold fell about 45% over the next four years. Silver lost more than 70% over the same stretch.
Those declines felt endless while they were happening. Gold still went on to make new all-time highs in 2020.
A 30% pullback in gold and a 50% pullback in silver hurt. This gold and silver correction still doesn’t break the long-term case for owning metals.
Why Rising Rates Have Hurt Metals
Rising rates have added fuel to the gold and silver correction. Higher rates increase the cost of carry, which is the expense of holding a position over time.
Metals also don’t pay you anything to own them. Outside of dividends from mining stocks, the everyday investor has no way to earn income from gold or silver.
That puts metals at a disadvantage when cash and bonds pay a competitive yield. Investors need a strong reason to give up that income.
Fortunately, the rise in rates has paused for now. That pause hasn’t ended the gold and silver correction yet.
With rates where they are, global conditions have to deteriorate meaningfully for metals to keep their allure. That’s a higher bar than metals faced when cash paid nothing.
Metals earn their place in a portfolio as the ultimate hedge against uncertainty. That uncertainty tends to show up in two forms:
- Monetary uncertainty, such as worries about inflation, currency values or central bank policy
- Geopolitical uncertainty, such as conflict between nations or major shifts in political power
Either one can bring buyers back to gold and silver quickly. Right now, I’m watching a catalyst that falls squarely in the second bucket.
Where I’m Shopping In This Gold And Silver Correction
The U.S. midterm elections are less than two weeks away. They’re setting up as a catalyst for a complete shift in power dynamics.
Obviously, I don’t know what the results will be. I can see what the charts are doing, though.
Back in January, I said you’d be better off owning crypto over metals in 2026. The charts told me the metals were stretched, and the gold and silver correction since then has backed that up.
Positions matter more than opinions. The charts are now telling me something different.
There’s still some downside left on the table here. I’m not ready to call the exact bottom.
This gold and silver correction is approaching key technical levels where it’s time to go shopping again. That’s where I’ll start getting positioned.
Here’s how to use this. Put gold and silver back on your watchlist this week.
Watch whether silver can reclaim its July lows. Watch whether gold keeps holding above its June lows.
Those two reference points will tell you whether the gold and silver correction is running out of steam. Once the key levels hit, be ready to act instead of waiting for the headlines to turn positive.
Just because nobody’s talking about it doesn’t mean it isn’t happening.
Stay tuned,
Gianni Di Poce
