Gold And Silver: The Coiled Spring Is About To Snap (Technical Analysis)

2026-05-14 16:39:05 ET

Gold And Silver: The Wedge Patterns Became Too Narrow

The goal of this article is to bring an observation on gold and silver to your attention. Lately, I’ve observed that both precious metals, as represented by the SPDR Gold Shares ETF ( GLD ) and the iShares Silver Trust ETF (SLV), have been trading in an increasingly narrow price range, forming the so-called wedged pattern. Furthermore, these patterns have narrowed so much by this time and reminded me about the compressed coil analogy. In my experience, markets cannot stay compressed indefinitely, especially for assets like gold and silver, which tend to exhibit higher volatility (say, compared to the S&P 500 (SP500) or bonds). As such, I see dominated odds for an imminent breakout. Of course, a coiled spring can break out in either direction (i.e., breakout or breakdown). As such, in the second half of this article, I will analyze the market forces that lead me to see larger odds for an upward breakout than a downward breakdown....

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