Gold Price New All-Time Highs

• The path higher continues to be a process of consolidation and runs — I’ve mused before that most of the upside in gold has unfolded over a series of days and weeks (and the rest of the time it’s just consolidation and ranging).

• In that respect, it’s a good sign to see the US$ gold price breaking out to new highs, and the Global Gold Price Index likewise headed onward and upward.

Gold Bull Markets

• Zooming out, the monthly log-scale chart helps put it into perspective — without overthinking anything, this is clearly a strong uptrend and is very much reminiscent of previous secular bull markets.

• All of which is to say there’s no signs of this thing slowing down.

Gold & Oil

• Which does bring me back to this one — gold is looking very stretched vs the rest of commodities (and on the flipside, crude oil is very stretched, but in the opposite direction). (source)

• Given the bullish prognosis above, I would continue to reiterate my personal view that I think the rest of commodities will start playing catch-up soon (i.e. that gold line can either go sideways or slightly lower with gold still buoyant, simply by the rest of commodities starting to pull their weight).

Energy Stocks vs Gold Miners

• The wide divergence in the performance of oil vs gold is also playing out in the Stockmarket, with energy sector equities having their worst run vs gold miners since the 2015-2020 period (which was followed by a massive snapback).

• There’s almost a car-crash effect with this chart — despite the carnage, you can’t stop looking at it…

Energy Stocks

• Lastly on energy stocks, I wanted to share a chart I featured in the latest Weekly ChartStorm (in a segment on energy sector stocks). (source)

• As I observed there: “global commodity stocks are pointing to a potentially profitable pathway for the energy sector“.

Subscribe to the Monthly Gold Market Chartbook for more insights…

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Australian Market Valuation Book —[Aussie mkts]

• Monthly Gold Market Pack — [Gold charts]

Industrial Metals Breaking Out

• Happy New Year — and Happy New High in industrial metals!

• While this year has already gotten off to a bang on a number of fronts, in my view this may well be one of the most important price developments in markets so far.

• Given the influence of economic growth on industrial metal demand, arguably this is both a bullish market development by itself and a macro signal of a stronger global economy heading into 2026.

Base Metals vs Monetary Metals

• Base metals are starting to play catch-up vs monetary metals.

• As previously mused: “The economic logic in the linkages or echoes across these metals is that you can see gold getting bolstered by fiscal largesse and monetary easing; which ultimately flows through into economic activity and greater demand for base metals (and higher prices).“

Industrial Metal Mining Stocks

• With great metal prices comes great stock prices for miners. (source)

• And this is a good reminder that one doesn’t necessarily need to invest in the commodities themselves, as the commodity producers’ stock prices have a habit of traveling in the same direction as the commodity prices.

Copper

• Looking at copper specifically, we are witnessing here an acceleration from long-term uptrend to upside breakout. It’s no secret that copper demand is set to surge in coming years thanks to a variety of thematic demand drivers (energy transition and electrification, AI and robotics, and even geopolitics), meanwhile investment in supply has been heavily constrained.

• As they say though, the best cure to high prices in commodities is high prices, so at some point if prices get bid high enough the supply will come. In the meantime it’s anyone’s guess as to how far this will run.

Copper/Gold Ratio

• Gold is still comfortably in a strong uptrend with solid price and monetary momentum backing it, but with the recent developments in industrial metals the copper vs gold ratio is starting to tick up from record lows.

• This echoes the point I mentioned about rotation from gold to the rest of commodities last week in the “Commodities Off-Topic ChartStorm“.

• Again, it’s already an interesting year so far for 2026, and with the steadily evolving outlook for commodities I think I’m going to have plenty of material for writing these weekly briefs this year!

Subscribe to the Monthly Gold Market Chartbook for more insights…

Subscribe now

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Professional — [institutional research service]

• Topdown Charts Entry-Level — [TD entry-level service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Precious Metal Procession

• In hindsight this turned out to be a prophetic chart, I first mentioned it in April, and what a spectacular catch-up run we’ve seen by Silver & Platinum.

Gold Outperformance Procession

• I first featured this chart back in February, suggesting room for catch-up by the black line (gold vs stocks relative performance). And gold sure did outperform vs stocks this year (gold up +66% vs stocks up +17%) — but perhaps the bigger open question is will the black line catch-up even further? (and what will that mean for how the world looks if that happens…)

Investor Allocations to Gold ETFs

• Meanwhile, despite the stellar run in gold, investor allocations to gold are still lukewarm — retail has largely slept on the gold bull market.

The Great Dollar Devaluation

• There’s a clear trend here.

Labor Devaluation?

• Do we call this labor devaluation? The hours of work required to buy 1 oz of gold has skyrocketed — maybe we should have asked to be paid in gold!

Sign up for the Monthly Gold Market Chartbook for more insights…

Subscribe now

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Professional — [institutional research service]

• Topdown Charts Entry-Level — [entry-level version]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

In case you missed it: Gold Market Chartbook - November 2025 (click through to check out the just-released latest monthly chart pack)

Golden Harbinger for Commodities

• While gold has more than doubled over the past couple of years, the rest of commodities have been stuck in a trading range.

• To the extent that some degree of the gold bull market reflects monetary easing and currency debasement, the logic of catch-up is one of monetary commodities (like gold) leading the charge and real-world activity-linked commodities playing catch-up later (just like what happened in 2020-22).

Valuation Indicators — Commodities vs Gold

• One key clue for possible gold-commodity rotation or even just commodity catch-up is where the valuation indicators are sitting for gold vs commodities.

• Gold looks expensive, while commodities look cheap.

• Whether it ends up being rotation (e.g. gold stumbles while commodities surge) or catch-up (gold stays steady or continues to climb, and the rest of commodities join the party) remains to be seen, but this chart definitely presents a bright picture for commodities.

Commodity Fund Flows

• One interesting development on this front is the surge in commodity fund flows, which might be a sign commodities are set to breakout.

• We saw similar surge when commodities turned up from the 2020 crash lows, again into the 2022 blow-off top, and also earlier back in 2015/16 when commodities started basing after the Supercycle bust.

Commodity Technicals

• On the technical analysis front, zooming out — the GSCI Light Energy Index’s 200-day moving average is turning up out of cyclical bear market and I would argue into an emerging cyclical bull market.

• Breadth is turning up again too, but to really gain conviction on this we ideally want to see breadth basically break out of this range and push higher. So that (along with the index itself) is a key variable to keep tabs on.

Macro — Monetary Tailwinds

• Lastly, as I highlighted in my 2026 Big Ideas webinar, we’ve seen a significant build-up in monetary tailwinds, and this is likely to contribute to a global economic reacceleration into 2026 (and resurgence in inflation — aka commodities upside).

• So overall for commodities it’s a situation of undervalued, improving technicals, and monetary/macro tailwinds. Hence why I have been bullish on commodities at the asset class (aggregate) level.

SURVEY — do you want more coverage of commodities in general?

(…or just stick to gold, precious metals, miners?)

Subscribe for more resources by the Monthly Gold Market Chartbook

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Professional — [institutional Macro/AA research service]

• Topdown Charts Entry-Level — [entry-level version of the above]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Bull Market Birthday

• Mike Zaccardi observes that we’re about to hit a major milestone: “gold’s bull market turns 10 years old next month!“ (source)

• Nothing says 10 years has to be the limit, certainly we should think about risk, but also there are still a lot of forces in motion that could easily carry the current bull market on higher for longer.

Trio of Triangles

• observes: “Gold’s surge over the past year has featured multiple triangle patterns and now another one is forming. If it breaks out successfully, it projects a rally to $5,200 for gold and $72 for silver.“ (source)

• In the short-term the resolution of this triangle one way or the other is going to be really critical in setting the tone for the next phase of things.

Gold ETF Flows — Retail Rinse

• Warren Pies observes on the popular GLD (gold) ETF: “From record inflows to extreme outflows. Retail sentiment toward gold has normalized...Gold bottom for this correction is in or close.“ (source)

• And indeed, you might argue the purpose of corrections and consolidations is to washout some of the extremes in sentiment and positioning.

Silver Allocations

• I noted the other day that “investor allocations to silver look pretty low vs history, but are steadily turning up. For something that has potential dual-tailwinds (monetary and macro) I’d say this looks early; room to run.“ (source)

• And in general I will say I’m more bullish on silver vs gold at the moment.

Gold Price vs Cost of Production

• And lastly a huge chart for miners: “we are seeing a rapidly widening gap between the annual average gold price and the average cost of production. On the upside, this (should) mean larger profits for gold miners, but also likely larger capex to bring new supply online.“ (source)

• It really is one to make you think too, because one thing I’ve observed is in the past when we saw similar premiums in the gold price vs cost of production it basically served as a valuation signal (that a top was near).

• But again, if gold manages to stay higher for longer and if miners can keep costs contained then that’s a recipe for printing money for miners.

ICYMI: I wrote up a mid-week “ChartStorm” on gold the other day.

The Weekly ChartStorm

Off-Topic ChartStorm: Gold [Update]

By popular request, here’s a mid-week ChartStorm on Gold (and Silver + Miners…

Read more

5 months ago · 46 likes · 4 comments · Callum Thomas

p.s. If you haven’t yet, be sure to Subscribe to the !

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

ETF Allocations — Gold Up, Crypto Down

• Just as allocations to gold ETFs are starting to move higher, allocations to crypto (Bitcoin & Ethereum) have peaked and rolled over.

• The below chart looks at “implied allocations“ of investors by taking basically the market share of aggregated assets in US listed ETFs. While there are obviously other ways to gain exposure to gold (and Bitcoin), this does give an insight into investor positioning in these assets via the ETF market.

Gold vs Bitcoin Ratio

• With Bitcoin heading into a bear market (down -25% from top-to-bottom), the gold vs bitcoin ratio is turning up off relative lows.

• Just as I noted how gold was breaking out vs stocks last week, this could well be the start of a major breakout by gold vs bitcoin. So it’s something to keep an eye on as the macro-risk backdrop shifts.

Commodity Stocks Sequence

• This one reminds me of my chart of processions in relative performance for gold vs other assets (gold outperforming cash, then bonds, and now stocks), and the sequence of breakouts in gold, then silver, and then industrial metals.

• So I think this observation is on the money, and I think this procession of processions is poignant. As Tavi observes: “Gold stocks broke out of a major consolidation. Copper miners followed with almost the same pattern. Energy equities are next, in my view.“ (source)

Global Energy Stocks

• And if you look at global energy stocks there is some very interesting price action underway indeed. The world energy stock index is turning up with strengthening breadth — and is set to challenge the upper end of that multi-year trading range.

• As with the chart above, put this sector on breakout watch.

Crude Oil on the Cusp

• Of course a key variable for the previous two charts is going to be what happens with the oil price. At the moment neither bulls nor bears have really been able to gain the upper hand, with crude oil stuck in the range.

• To me what’s significant about this chart is the fact that despite all the bearishness on energy prices, WTI crude has managed to hold valiantly onto that lower support level. In other words, the absence of a bearish breakdown is evidence of bullishness.

• And the other thing is Consensus Inc sentiment has been steadily ticking higher off previous consensus pessimism. That’s a classic bullish sentiment signal.

• So I think crude oil and energy stocks are well worth keeping a close eye on, and they could be the next big thing and perhaps even *the* big story of 2026.

Subscribe now

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Great Gold Bull Consolidations

• As the post-peak consolidation in gold wears on, it’s worth reflecting on the path of gold bull markets in general, but especially the previous major gold bull market.

• The 2000’s big bull featured several long periods of consolidation, and multiple smaller consolidations — in fact a key feature of gold bull markets seems to be that much of the upward movement happened basically across a series of weeks (and in some cases a few key days).

• Or in other words, it doesn’t go up in a straight line even when its going up big.

Gold vs Stocks

• Speaking of lines, it seems like the gold/stock ratio is in the process of breaking out of its multi-decade triangle pattern. (source)

• If it does breakout then that’s going to be a major development for both stocks and gold (and probably more of an issue for stocks because a key way gold can start outperforming stocks is if stocks go down e.g. as what happened during the up-waves in the early-2000’s and 08/09).

Relative Return Procession

• And for the naysayers and doubters, the prospect of gold taking the upper hand vs stocks would in some ways just be a simple and natural progression of the relative return procession seen in this key asset-allocators-guide-chart. (source)

Gold Miners vs the Stockmarket

• For completeness, here’s another relative returns chart but for gold miners (both in total return terms, i.e. dividends included) — you see a similar stalemate in miners vs stocks over the past decade.

• But one key thought on this chart is: if that gold vs stocks line is breaking out, then this is also going to be one to watch. I consider miners (especially on a relative basis) to be basically a type of defensive stock… and so again, if you did have gold beating stocks because stocks started going down, then you probably also see this one breaking out of that range too.

Stocks vs Gold — Valuations

• Lastly, the interesting thing about the gold vs stocks calculus is that while probably everyone knows about how stocks are expensive… gold isn’t exactly cheap either.

• Indeed, it’s a little harder to try pick a winner here when both are at an expensive starting point (whereas for example commodities ex-gold and bonds are cheap).

• So it almost becomes a thing of which one has the greatest chance of becoming even more expensive… (but again, when it comes to relative performance, the question can simply be phrased as: which one has the greater chance of downside vs holding steady —because that’s another way you can get the relative returns worm to turn).

ALERT: 2026 Big Ideas Outlook Webinar

This week Head of Research & Founder of Topdown Charts, Callum Thomas will take you through some of his big charts and big ideas for the global macro/market outlook that are either already in progress or set to become major risks + opportunities into 2026… —[ Register Now ]

Register: 2026 Outlook Webinar

[Webinar is scheduled for EST 2pm Wednesday the 12th of November 2025]

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Gold — Long-Term Trend

• Zooming out to the big picture, the trend is still your friend for gold. (source)

Gold Valuation Indicator

• While the trend is still strong and up, investor allocations still have room to rise, and monetary tailwinds are still significantly supportive, the composite gold valuation indicator is in extreme expensive territory. (source)

• History tells us expensive markets can get more expensive, but it also warns that periods of correction and consolidation are on the horizon.

• See also: Gold Valuation Indicators in Focus (indicator methodology)

Gold vs Silver vs Base Metals

• I continue to think this is one of the most important charts in commodities and certainly at least for metals. The procession of price leadership from monetary metals like gold to monetary-industrial hybrid metals like silver, and then to industrial metals (e.g. copper, aluminum, zinc) is a force set in motion here.

• There are several tailwinds building behind base metals, and a breakout is in progress.

Industrial Metals

• One key element in the cyclical outlook for industrial metals is the “global growth reacceleration“ theme, which I outlined last week — basically it looks like global growth is set to heat up in 2026. (source)

• With industrial metals very much sensitive to the ebb and flow in the global economic growth pulse, I believe this is going to be a key barometer market too (helpful in tracking that macro theme).

• And so when you see industrial metals breaking out like this it says as much about the opportunity in metals as it does about the macro outlook.

Commodities (and Emerging Markets)

• On a similar note, here’s a chart from my global cross-asset market monitor report — the key highlight being the emerging bull market in emerging market equities (notably in EM ex-Asia; which are generally more sensitive to commodity prices). (source)

• And then set that alongside the bullish bottoming process on display in commodities (using the relatively diversified GSCI light energy index here), and it’s both confirmation of the previous chart and themes + further prompt to consider the bullish picture emerging in these still kind of out-of-fashion markets (everyone is focused on US big tech and missing what’s happening here).

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

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If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Gold ETF Allocations

• I shared a chart of total assets in gold ETFs the other day and noted that while most of the surge in AUM was market movements, there had been an uptick in flows. But I also wanted to update this, what you might call fuller picture, version which shows gold ETF assets as a percentage of all ETF assets (aka “implied allocations“).

• The chart implies investors still have a relatively low allocation to gold ETFs — and even after the dream run gold has had, this indicator is still yet to eclipse the previous 2 high points.

ETF Holdings of Gold

• Another angle is looking at the total gold holdings of ETFs, and much as I mused above, there has indeed been an increase here — but similar to the previous chart, it’s still lower than where it got to in 2020. (source)

Deviation from 200-day Moving Average

• Moving on to technicals, one observation worth highlighting is the deviation from 200-day moving average. From a basic technicals standpoint it’s generally a good thing if a market is above its 200-day average (a simple gauge of uptrend vs downtrend). (source)

• But it has historically been problematic for gold when it goes too far too fast beyond its 200dma — we see several instances where this indicator goes above 20% in the chart below which ultimately resulted in a peak or period of consolidation. So it’s no surprise in that context to see a pullback/pause in gold.

Flows Climax

• On a similar note, we’ve seen a surge in investor interest in gold, as demonstrated by the record high flows into gold funds (and as another point of interest, there was a record high surge in gold call options). (source)

• It all adds up to gold finally starting to see some speculative interest and flows-frenzy; and again it’s only natural to see periods of consolidation following such conditions as markets digest the excesses and buyer/seller activity balance out.

Gold vs all other Commodities

• Lastly, I updated this chart the other day when talking about the potential upside in crude oil; which by contrast is a much-hated commodity by most investors at the moment. (source)

• On first glance of this chart you might be tempted to say that crude oil looks cheap and due for a bounce, and gold looks stretched (and that all other commodities may need to start pulling their weight!).

• Either way, it’s always interesting to see extremes like these emerging, as that’s where some of the best opportunities and biggest risks are born…

This note was brought to you by the Monthly Gold Market Chartbook

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

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If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Gold Volatility

• We just saw another spike in Gold market implied volatility. Spikes in GVZ (the CBOE gold implied volatility index) are often seen around turning points and trend exhaustions; and basically it suggests a period of consolidation — a pause in the gold bull.

Gold Breakout Analogs

• Interestingly this would be consistent with some of the previous major gold breakouts — as Jordan Roy-byrne points out below, past big breakouts have entered into a bit of consolidation and ranging around this stage before moving on to more gains. And the implication being that if it can get through a healthy consolidation then much greater upside could still be on the way.

• “Gold All-Time High Breakout Analog Gold has followed the two averages closely. From around here, both averages corrected for 5 months, then surged higher. [this implies] Weaker = $5800 in 16 months, Stronger = $6700 in 10 months.” (source)

Central Bank Buying

• Meanwhile, the big driver of this bull market continues to be central bank buying as the US government seemingly does all it can to discourage investors from wanting to invest in US dollars or US debt.

• To be more specific, the risk to unfriendly governments of asset freezes makes gold a more attractive reserve asset, while ongoing policy uncertainty, shutdowns, and questions around fiscal sustainability has driven investors increasingly out of bonds and into gold.

Gold Share vs Stocks & Bonds

• And yet, as a share of the mainstream global investable assets, gold is still relatively small in the scheme of things: “Over the past 2 years, Gold has moved from 4% to 6% of global investable assets. That’s the highest share since 1986. During the 1980 Gold bubble it peaked at 22% of global investable assets. 20 years later (in 2000) it fell to just 1%.” (source)

• From a signal standpoint this number is starting to get elevated, but the all-time historical peak reading of 22% goes to show it’s anyone’s guess as to how far things can go here.

Gold vs Stocks & Bonds

• This last chart from the monthly pack provides some interesting perspective on gold vs stocks and bonds from an asset allocation perspective. As I’ve previously noted, it has previously made a lot of sense for investors to skew their defensive sleave into gold vs bonds, but equally the longer arc of history shows how this should be a dynamic as well as strategic decision [as I’ve said before: diversify your diversifiers (some gold, some bonds), and diversify dynamically (sometimes more gold, sometimes more bonds)].

• It also goes to show the value of diversification in general as each of the three assets go through differing periods of boom and bust.

• And as a final thought, the similarities between the current move (and inflationary shock aspect) to the 1970’s bull runs certainly makes one think…

This note was brought to you by the Monthly Gold Market Chartbook

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Poll: what’s next for gold?

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Debasement

• The flipside of surging gold prices is a long-term and near-consistent loss of purchasing power by the US dollar over time.

• As they say: “invert, always invert“ (the chart shows how many ounces of gold you can buy with 1 US dollar — and n.b. it is in log scale).

Labor Devaluation

• The other debasement going on is what you might effectively call the devaluation of labor. The hours of work it takes the average worker in the USA to buy 1 oz of gold has smashed out of the range that prevailed over the past 100 years to a new all-time high.

Gold vs Other Assets

• Gold has easily beaten the low bar set by cash and bonds (even including interest reinvested) — and now, with a lag, gold seems to be taking the upper hand vs the stockmarket (which has set a much higher performance hurdle).

• This is a very interesting development in terms of the gold bull market, but also in terms of what it might mean for the stockmarket (pay attention to the periods when gold started beating stocks e.g. early-2000’s dot-com burst, and then again another wave up during the 08 financial crisis).

Gold vs Bitcoin

• Here’s an interesting fact you might have missed: the gold vs bitcoin ratio has made a higher low (and is turning up again …also, the previous low occurred at a major support level).

• Again, I think you can argue that this says as much about the momentum in gold as it does about the outlook for bitcoin (which in many ways behaves more like a risk asset and has a much higher correlation with stocks than bonds).

The Great Gold-Oil Anomaly of 2025

• Lastly, keeping things big picture and perspective building this week, you might have seen it already, but I think it’s quite interesting and echoes some of what I’ve been saying recently (about oil vs gold).

• “big gold gain + big oil loss = historical anomaly” (source)

This note was brought to you by the Monthly Gold Market Chartbook

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Metal Price Procession

• Continuing with the theme of recent editions, this chart shows the price procession across metals, with gold being the most pure monetary metal; silver being partly a monetary metal and partly an industrial metal; and industrial metals being metals of industry.

• The key distinction is that monetary metals are driven more by monetary factors; fiscal issues, central bank operations, fiat flows, and things of that nature. While industrial metals are more driven by real economic activity (along with swings in supply, and other issues).

• The economic logic in the linkages or echoes across these metals is that you can see gold getting bolstered by fiscal largesse and monetary easing; which ultimately flows through into economic activity and greater demand for base metals (and higher prices).

Copper vs Gold Ratio

• On a similar note, here’s the copper/gold ratio meandering along its long-term major support level. I think odds are good we rally off this level partly from a technical standpoint given the moves in relative sentiment (bullish divergence).

• But also because my base case is we see improved economic activity into 2026, and copper enjoys multiple thematic + cyclical tailwinds… meanwhile the run in gold has been fast and furious, and again I reckon it’s high time for catch-up by the rest of commodities.

Oil vs Gold Ratio

• Which brings us to the oil vs gold ratio — which has plunged to its second lowest reading in recent recorded history.

• One way to look at this is to say that oil looks cheap vs gold.

Checking in on Crude Oil

• But if you’re sitting there about to tell me how bad things are for crude, I understand. Supply has been beating demand lately on the crude oil front, I will admit that (I mean, it barely rallied through the unprecedented Israel/US-Iran conflict earlier this year, and seems unphased by the US military build-up around Venezuela).

• In the end, I think this chart is helpful in setting the lines in the sand: so far crude has managed to hold onto that major lower support level, with neither bulls nor bears able to get it out of the range trade… so I’d say when we break (either way) on this it’s going to be big.

• My bias is higher, and the sentiment pattern below (and my macro outlook) is supportive of that, but let’s see what happens.

Housing Priced in Gold

• Lastly, a bit of fun with charts — the ounces of gold required to buy a new house in the USA is approaching record lows (thanks mostly to soaring gold prices, but also lackluster housing).

• In other words, houses are extremely cheap when priced in gold(!)

This note was brought to you by the Monthly Gold Market Chartbook

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Gold Miners vs S&P500

• This chart will probably be no surprise to regular readers given GDX (gold miners ETF) is up +111% YTD vs S&P500 +13% — but from a technical standpoint this is a fantastic chart.

• The relative performance line has broken out through a major resistance line (after an initial failed breakout), and relative performance breadth is running strong. But I think many are sitting there on the sidelines and thinking “how much further can gold miners go?”

Gold/Miners Relative Strength Gap

• Here’s one perspective — this chart shows (log scale) the relative performance of gold vs the S&P500 and gold miners vs the S&P500.

• You can see a large gap opening up as gold miners failed to keep up during the later stages of the 2000’s gold bull market. But this gap is starting to close, and one answer to that question above is that they may well still have quite a bit of room to run if this gap is to be closed.

Gold Miners Relative Value

• Another angle is simply looking at relative value — gold miners, despite their strong gains relative to the S&P500, are still trading at a 30% discount on a price-to-book ratio basis.

• There’s 2 potential answers for how much further they can go on this chart; 1 is that they go to the upper end of the range which seems to be about a 20% discount (still some room), and 2 is that they go all the way to trading at a premium and match the previous peak (lots of room).

• Either way there is room to run.

• One final point I would note though in passing is that we can see ongoing outperformance of gold miners vs the S&P500 through either or a combination of the same situation (virtuous/good) of both rising but miners rising more… or through the less great way of both falling but miners falling less (or still gaining/simply holding ground vs falling S&P500). And I think that second point is worth musing upon given some of the extremes we are seeing in the US stockmarket lately.

Relative Performance (Gold & Oil)

• Moving on, I find this one very interesting given the developing extremes on display — it shows the relative price ratio of oil vs all other commodities (black line) and gold vs all other commodities (gold line).

• Gold is getting close to making new relative highs, and oil is getting close to making new relative lows. My inner contrarian can’t help but think about this chart looking like a rubber band stretching… where at some point it snaps back and gold corrects, crude oil soars.

Follow the Leader

• But I think the other key point, and the more interesting angle, is that it’s simply getting closer and closer to commodities’ time to join the stage.

• As I noted last week, I believe a big breakout is coming in commodities, and if/when it comes we will look back on this chart and see that gold was shouting and screaming at us to take notice…

This note was brought to you by the Monthly Gold Market Chartbook

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SURVEY: Following on from the last 2 charts, what do you reckon has the most upside over the next 12-months? Will gold extend its run? Will crude oil surprise? Will the “Commodity Supercycle“ come back into the lexicon? (…or something else?)

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Gold ETF AUM

• As gold pushes on to fresh new highs, so too does the aggregated Assets Under Management figure for US listed gold ETFs.

• But this is only part of the picture… (price is doing a lot of heavy lifting).

Gold ETF Allocations

• For example, when compared to all other ETFs, gold ETF “implied allocations“ have only just made new multi-year highs… but remain well below long-term average (and previous highs).

• If there’s a bubble in gold, it isn’t on display here.

Gold ETF Holdings of Gold

• Another interesting aspect, which tracks with the tepid allocations (and for reference; flows have also been lukewarm), is that collectively gold ETFs hold *less* tons of gold now than during the local peak back in 2020. (source)

• Curiously, this indicator has *not* confirmed the new highs in gold, and actually peaked back in April.

• There’s a lot of things driving the current gold bull market, but speculative retail participation via ETFs is not really a key driver by the looks of things here.

Gold Miners vs Energy ETF Allocations

• Another interesting one on the “implied allocations“ front: even after a more than 100% gain YTD, gold mining stock ETF allocations are barely up off the lows and pale in comparison to previous peaks.

• That may well mean room to run for miners.

• The other interesting aspect is how there is equally relatively little enthusiasm for Energy (oil & gas) ETFs — I think this goes to show how underexposed investors are in general to a prospective new bull market in commodities in general.

Commodity Bull Market — Coming Soon…?

• Speaking of which, I don’t think people understand just what’s going on in commodities right now (and the implications for inflation).

• Commodities as a group have been undergoing a multi-year bottoming process, and the logical next step from a technical (and macro) standpoint is a new cyclical bull market.

• As I’ve previously outlined, I believe the strong run in gold is a key harbinger here; expect inflation to be a key theme in 2026.

This note was brought to you by the Monthly Gold Market Chartbook

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SURVEY: Out of curiosity (since it’s topical this week), if you invest in gold — how do you primarily obtain exposure (i.e. as your main/largest position in gold)?

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Bonus Chart — the ETF Launch Frenzy

I thought it might be interesting to share the bonus chart from the latest Weekly S&P500 ChartStorm because it also deals with the ETF market. This chart covers all the different ETFs listed in the USA and tracks the rolling 12-month net change in the number of ETFs…

The key point is it just reached a record high, and if you scan through the latest launches it’s mostly highly leveraged equity ETFs (and leveraged single stock ETFs (!)) — so I would say while this might not necessarily be a topping signal for the increasingly frothy equity market, it is certainly a sign of the times…

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Global Gold Price

• I commented a couple of weeks ago with regards to this chart: “I recommend keeping a close eye on gold in the coming weeks because while it could just keep ranging, a breakout (either way) is going to set the tone for the rest of the year and probably into next year too for that matter…“ —and now the tone is set! That’s a clear upside breakout for US$ gold and the global gold price index (and hence a bullish continuation). (source)

Gold vs Commodities

• With gold breaking higher, the rest of commodities are basically sitting there waiting as an increasingly tightly coiled spring.

• I expect commodities to play catch-up and inflation risk to come online heading into next year (in my view inflation will be the big issue of 2026). (source)

Fiscal Tailwinds

• Gold Bull Market = Bond Buyers Strike?

• Depending who you ask, some will tell you a key driver of the current bull market in gold is basically a sort of buyer’s strike on treasuries. Partly due to geopolitics (risk of asset freeze) and partly due to fiscal largesse (surging debt/deficit), and a bit of political/policy risk in the USA.

• The chart below would appear to lend some weight to the fiscal side of things as US government debt balloons ever-higher. (source)

Gold vs Bonds (price)

• Another angle on it is how substantially and relentlessly gold has outperformed treasuries (even with interest included). The run of relative performance in gold vs treasuries ranks among the most significant moves in history.

Gold vs Bonds (value)

• As a result of that extended run of outperformance, gold now looks expensive and treasuries look cheap — which is a departure from the usual habit of the two to tread a similar path.

• But here’s an interesting thought: you could get a situation where gold continues to trend higher in absolute terms, and treasuries play catch-up and outperform. From a macro standpoint the most likely situation for that would be recession or crisis; triggering safe-haven flows and lower Fed funds rate helping drive bond yields down (or other extraordinary Fed policy moves).

• In other words, that would be the defensive angle. I always say on defensives and diversifiers in a multi-asset portfolio; diversify your diversifiers (some gold, some bonds) and diversify dynamically (sometimes more gold, sometimes more bonds) based on the lay of the land. And this land looks interesting…

Surveys: What do you think?

What’s your 1-year outlook for gold:

What’s your 1-year outlook for Treasuries (10-year government bonds):

(n.b. feel welcome to discuss in the comments section)

This note was brought to you by the Monthly Gold Market Chartbook

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The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

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If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

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• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Consolidation Culmination

• The big news in precious metals land of course has been the initial breakout in gold — it seems gold is finally shaking off that 5-month consolidation phase. (source)

• I will caution though that this breakout has happened while US banks and exchanges are on holiday (Labor Day), so the next few days are going to be absolutely critical to see if the breakout can hold (vs fold).

• If this breakout holds it’s going to be simply a case of onwards and upwards.

Issues in Valuations

• On the other hand, one of the key charts in the pack is that of valuations (and p.s. I asked the adobe AI to tell me the most interesting charts in the latest monthly pack pdf, and it came up with some very interesting and surprisingly good answers! —so a tip for subscribers: try asking AI about the monthly gold market chartbook pdf :-) (source)

• The key issue is the composite valuation indicator is showing up as significantly expensive. But the key offsetting factors are three: 1. technicals still look strong; 2. monetary tailwinds (fiscal largesse, debasement, reserves diversification) are still significant; and 3. the gold-drivers value indicator (blue line below) is still cheap (i.e. the USD is expensive and can go lower [bullish gold], and bonds are cheap and therefore real yields could go lower [bullish gold]).

• So it is something to be mindful of, but as they say: expensive markets can get more expensive…

• [see also: Gold Valuation Indicators — Theory & Practice]

Reserves Reverse

• As noted, a key force behind the global gold bull market has been central banks reserves diversification.

• As Tavi notes: “Foreign central banks now officially hold more gold than US Treasuries — for the first time since 1996. Let that sink in. If you think this buying streak is ending, just look at what happened in the 1970s. This is likely the beginning of one of the most significant global rebalancings we've experienced in recent history, in my view.” (source)

Stocks vs Gold

• And that could mean big things for gold relative to stocks… as Ronnie notes: “120 years of history say it loud: Did the S&P 500 / Gold ratio just roll over? To mean revert back to its long-term average (1.14), gold would need to triple.

  Every past collapse (1930s, 1970s, 2000s) = gold’s biggest bull runs.” (source)

• Although I would note for completeness: technically you could also get mean reversion by stocks slumping and gold either holding ground or falling less than stocks (and stocks do look a bit frothy).

Gold vs Major Assets

• Finally, here’s another angle on gold vs stocks (this is showing it the other way round i.e. the ratio of gold to stocks; *and* in total return terms; i.e. including dividends for stocks, and interest for cash/bonds). (source)

• See if you can spot the odd one out…

This note was brought to you by the Monthly Gold Market Chartbook

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Global Gold Price

• While the US$ gold price appears to be trading in an ascending triangle pattern (which tends to have a bullish skew to resolutions; breaks higher more often than down), the Global Gold Price Index is looking more like a symmetrical triangle (could go either way) …and if anything more recently looks like a descending triangle.

• I recommend keeping a close eye on gold in the coming weeks because while it could just keep ranging, a breakout (either way) is going to set the tone for the rest of the year and probably into next year too for that matter…

September Seasonality

• As I’ve been highlighting over on the Weekly ChartStorm, while the stockmarket has some of its worst seasonal performance around September, it’s the opposite for gold —September has historically been the second best month of the year for the US$ gold price in terms of average return and probability of gains.

Big Bulls and Big Ranges

• While the current consolidation in gold has been going on for 5 months so far, it’s worth keeping in perspective that the last big bull market in gold featured 3 major periods of consolidation lasting 12-18 months.

• So even if we do range-trade-for-longer, it doesn’t necessarily mean an end to the bull market, and in fact might be quite a normal feature.

Gold Miners

• One good thing about higher for longer gold prices, even if we are stuck in consolidation mode, is that it means higher profits for gold miners and those holding gold mining stocks.

• And indeed, it’s a picture of strength for gold miners with the index making higher highs, comfortably above its upward-sloping 200-day moving average, and breadth running about as strong as it gets.

China Gold Buy—/Bye?

• I highlighted in my latest Weekly Macro Themes report that Chinese government bond yields are on the move higher… as the chart below shows, this could be an issue for gold: “One risk of downside in CGBs would be rotation out of bonds *and gold* (removing a previous tailwind for gold)”. (source)

This note was brought to you by the Monthly Gold Market Chartbook

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About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Inflation Risk

• While agri commodities have been through a recent soft patch, I think it’s important not to be complacent on upside risk here; particularly as it echoes some of the trends seen in gold and inflation risk in general. And it’s not the only chart highlighting inflation upside risk…

Inflation Resurgence Risk

• As Tavi Costa notes: “The story of the week was the re-emergence of inflation. The question now is whether this was a one-off print or the early signs of a genuine resurgence in prices.“ (source)

• I think we all know the answer here. Inflation expectations are still running high and in lieu of a recession, there are several upside risks to inflation (tight labor markets, commodity price upside risk, resilient economy, monetary easing, fiscal stimulus, fiat devaluation) — if we do see inflation pressures start to come through that’s going to immediately factor into price negotiations given the lingering psychological effects of the 2021-22 inflation shocks.

Global Inflation Resurgence Risk

• Meanwhile on the global front with central banks around the world pouring stimulus into the system (partly as a preemptive measure to counteract tariff headwinds), there is a real prospect of global growth reacceleration and inflation resurgence —as the chart below highlights. (source)

Industrial Metals

• One area of markets I’ve been highlighting as likely to prove helpful in detecting the emergence of global growth reacceleration and inflation resurgence risk is industrial metal prices. (source)

• For now we see they’re still stuck in the middle, and for reference; the macro risk scenario of them breaking *down* instead of up would be deflation and recession (i.e. the opposite of reacceleration + resurgence); I’m not seeing any evidence for that path just yet. My base case is a breakout to the upside driven by better growth and higher inflation.

Metal Musings

• And finally if we take the lead from gold (and subsequently silver), the next move in this chart should be a move higher in industrial metals.

• I would argue the economic logic in this chart is that gold has in part been driven up by devaluation and monetary easing; which have in part laid the foundation for better growth ahead (and inflation upside risk).

• In terms of implications for gold prices, I would say that rotation is the bigger theme here (as other commodities play catch-up to gold). So while we could still see some upside in gold, I’d say the bigger opportunity is elsewhere in commodities at this stage of the monetary-macro-metal cycle.

This note was brought to you by the Monthly Gold Market Chartbook

Subscribe now

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Act Now — (if you’re not already a subscriber), sign up to get instant access to the latest chartbook + archives; level-up your understanding and visibility on the key risks & opportunities in gold and precious metals investing.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

Semi-Annual Twitter Survey

• I’ve been running a semi-annual survey on twitter asking whether folk allocate to gold (and bitcoin/crypto) + whether they are individual or institutional investors. I just ran the latest survey and the results are interesting…

• First on the Individual side, investors reported an increased incidence of allocating to both gold and crypto, but with crypto reaching a record high (not surprising given the strong run in prices there + popularity of both crypt and gold as hedges against fiat devaluation risk).

ETF Market Data — Gold vs Crypto

• Interestingly this maps closely to the trend in ETF market implied allocations both in terms of gold implied allocations being still below 2020 levels, and with crypto allocations rising to record highs (and close to on-par with gold).

• I think these both add a lot of credence to the idea that crypto has siphoned off an element of gold/precious metals speculative demand; particularly as the narrative has been that they both benefit from similar monetary/macro trends.

Semi-Annual Twitter Survey [Institutional]

• As for the institutional side of things, there is a similar but less pronounced trend. But one caveat on this is: I tried running similar surveys on LinkedIn and while the results were consistent for individuals, and for institutional on gold, the twitter survey seems to be overstating allocations to crypto (maybe some wishful thinking, or maybe the anonymity of Twitter allows different answers).

• But 2 key takeaways here: first, this survey suggests about 40% of institutional investors *don’t* allocate to gold (and that lines up with the next chart), second; it seems like it’s still an easier sell for institutional investors to allocate to gold vs crypto… but also you probably shouldn’t expect institutional crypto allocations to rise that much further if ~40% still won’t even bother with relatively staid old gold.

Fund Manager Survey: Gold vs Crypto Allocations

• As noted, the latest BofA fund manager survey also indicated that ~40% of fund managers *do not* allocate anything to gold, and 75% don’t touch crypto. (source)

• And for gold allocations, the weighted average is a paltry 2%.

This note was brought to you by the Monthly Gold Market Chartbook

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If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]

>>> Valuations in Focus: this week I’m going to provide some insight into how the gold market valuation indicators work — because the conventional wisdom is that it’s hard/impossible to put a value on gold + I’ve had a few questions about it recently, so I will explain! :-)

The Composite Valuation Indicator

• First up is the big beast itself: our Composite Gold Market Valuation Indicator. It splices together 3 key approaches (shown in the next chart), and those approaches collectively bring in information from dozens of different individual data series and sources. (source)

• The key point is that it is fit for purpose (i.e. it helps us navigate market cycles by signaling that the market is expensive around market peaks and cheap around market troughs) and it lines up with the 3 key principles of valuation indicator design (as explained below in the 4th chart).

• As to the current signal, it is telling us the market is expensive, and therefore we should have a greater emphasis on risk management — but as explained in chart 5, we don’t stop there (and it’s only part of the picture).

The Components

• This next chart from the monthly pack lays out the 3 key approaches, which are explained in detail below. (source)

• Gold Value Proxies — this is an absolute value indicator, it combines the equal-weighted z-score of the following: real gold price (deflated by US CPI), money supply adjusted gold price (deflated by US M2 money supply), detrended relative price ratio (vs all other commodities), and a 3-year nominal price mean reversion factor.

• vs Cost of Production — this one tracks the gold price relative to the estimated industry-wide average cost of production (the logic being that a very high price vs cost of production represents abnormal profits and will incentivize further exploration, increased production, and increased recycling supply —with the reverse being true for times of low gold price vs cost of production).

• Gold Drivers — this one is almost more of a relative value indicator in that it tracks the valuations of intermarket gold drivers (the US dollar and real yields); it’s an equal-weighted average of the Topdown Charts valuation scores for US treasuries and US dollar (USD inverted; because the logic is a stronger/weaker dollar is all-else-equal associated with a weaker/stronger US$ gold price respectively).

• These 3 components are all individually calculated as an all-time z-score [ =(latest-average(all))/stdev(all) ] so as to put them on a common/comparable basis, and each indicator is given an equal “vote“ (i.e. an equal-weighted average) for the composite valuation indicator.

Wait, But Why?

• Before we look at indicator design concepts, let’s start with why we even look at valuation indicators AND what we mean specifically. (source)

• First though, let’s clarify definition and meaning: when I say valuation indicator here I specifically mean a time series that indicates expensive valuations for the market in question at or near the peak of past market cycles, and indicates cheap valuations at or near past market troughs.

  • What I don’t mean is a DCF valuation that a stock analyst might use, or a present value calculation for bond interest coupons, or a cap rate or comparable transactions snapshot that a real estate valuation might use. I’m not sure if you can come up with something like that for gold, but I have well developed expertise and experience in designing valuation indicators that can reliably and logically tell us when we are near market tops and bottoms — and we use those specifically for market cycle analysis.

• The reason we study market cycles is to help capture upside opportunities and try reduce exposure to downside risk. From an asset allocation standpoint it’s about coming up with sound rationale for dynamically adjusting portfolio allocations to improve portfolio returns and reduce volatility and ideally reduce the risk/magnitude of negative portfolio returns. I’m sure some of you will have a different reason for wanting insight into market cycles for gold (e.g. hedging, treasury, planning, etc), but that’s the perspective I bring to it.

Valuation Indicator Concepts

• This part helps answer why I used the inputs that I have, and what we want from a valuation indicator. (source)

• A good valuation indicator ideally needs to be explainable (i.e. can you easily explain why it works, why you selected that data series and information source —i.e. the economic logic behind it).

• But perhaps more importantly, from a pragmatic standpoint it needs to be sensible and reliable… it needs to give you the right signal (e.g. expensive at a market peak, cheap at a market trough), and do that consistently across time.

• Ultimately if it doesn’t do what it’s supposed to then it doesn’t matter if you can explain it or what the logic is —but by the same token you don’t want to just be doing data-mining, there should be logic and clear intuition behind it even if it works perfectly (otherwise it might stop working one day and you won’t know why it should have worked in the first place).

The Bigger Picture

• Last but not least, I always say that valuations should be one of the first things you look at, but certainly not the last thing. (source)

• The below table gives a high level overview of how I approach market analysis and it can be applied to just about every asset class and market.

• The core concept is you are trying to build a puzzle, so you want to get your hands on multiple puzzle pieces to raise the odds of you figuring out what the picture is.

• Practically what this means is in the example of gold, the starting point may be that we have an expensive valuation signal, but then that’s not enough — if there is strong price momentum and monetary tailwinds: that might offset or outweigh the expensive valuation signal. But if monetary tailwinds begin to fade and technicals break down, sentiment rolls over from consensus bullish, flows turn from crowding in to crowding out, and the larger macro narrative begins to shift, then the cycle could well turn from bull to bear market… and in the end, prior to all of that, we got advance warning from the valuation signals.

• So ultimately I think valuations are a key piece of the puzzle and the valuation indicator I have put together for the Monthly Gold Market Chartbook does a great job of helping us navigate long-term cycles in the gold price.

About the Monthly Gold Market Chartbook

The monthly Gold Market Chartbook is specifically designed to help busy investors quickly + easily understand the key drivers of risk vs opportunity in the gold market (and how it fits into traditional portfolios).

The pack includes over 70 charts, specialized indicators, and unique data, spanning:

• Sentiment/Flows/Positioning (where are the pressures building up?)

• Technicals, Global Gold Price (momentum, trend, divergences)

• Long-term & Valuation Indicators (is gold overvalued?)

• Gold Influences: Monetary & Macro (monetary tailwinds in play)

• Gold Influences: Supply & Demand (supply vs demand outlook)

• Gold Priced in other Currencies (what’s gold doing elsewhere?)

• Gold Price Ratios (how is gold performing vs other assets?)

• Asset Allocation Perspectives on Gold (how does gold fit in portfolios?)

• Asset Watch: Stocks/Bonds/USD/Credit (risks vs opportunities in other major asset classes — and how that compares vs gold)

• Silver Charts Section: sentiment, positioning, flows, valuations (i.e. how is the outlook for silver prices?)

• NEW: Gold Miners: valuations, flows, allocations, fundamentals (i.e. what’s the risk/return setup for Gold Mining stocks?)

• NEW: Other Precious Metals (Platinum & Palladium charts)

Subscribe Now — if you haven’t already subscribed (e.g. if you were forwarded this email) be sure to sign up using the button below.

Subscribe now

If you have any questions/suggestions about the material or requests, simply get in touch via the website, we’d love to hear your thoughts.

Best wishes,
Callum Thomas
Head of Research & Founder
Topdown Charts | www.topdowncharts.com
LinkedIn: https://www.linkedin.com/in/callum-thomas-4990063/

NEW: Other services by Topdown Charts

• Topdown Charts Entry-Level — [TD entry-level service]

• Topdown Charts Professional — [institutional service]

• Weekly S&P 500 ChartStorm —[US Equities in focus]

• Monthly Gold Market Pack — [Gold charts]

• Australian Market Valuation Book —[Aussie markets]