Bull Trap or Launchpad? Gold's Next Move Hinges on This

There are three important charts that are going to tell us which direction the next important move in gold and silver is going to go, and each one is at a critical inflection point.

The first chart is the bearish scenario, which shows the morphing H&S top. When NL1 was broken to the downside, we got the classic backtest, confirming H&S 1. Now the price action is testing NL2 and is getting a second bounce, telling us it’s important. GLD is currently strongly backtesting its neckline and could tell us if the rest of the necklines may fail, as it generally leads the rest of the PM complex. SLV still has a bit further to go to its NL2, while the rest of the PM stock indexes haven’t broken below their second neckline yet. This is why this area is a critical inflection point.

For me, it’s always about keeping an open mind and not being locked in to one belief that the markets have to do a certain thing. If the charts change, then so will I.

The bullish case for the PM complex is the potential bullish falling wedge, which is testing the low of the decline off the all time high. When this correction started at the beginning of this year, I mentioned that we could now see a larger consolidation pattern start to form that would be larger than any of the consolidation patterns up to the all time highs, which could take many months or possibly years to complete.

I had enough annotations to do GDM, so that can be your proxy for the rest of the PM complex. The current price action is now testing the low of the correction and the possible 4th reversal point in the February 2026 bullish falling wedge if the top trend line is exceeded.

Keep in mind, many large consolidation patterns begin with a pattern like the bearish falling wedge, which has a minimum price objective up to reversal point #1 where the falling wedge began to form. From reversal point #1 to reversal point #4 in the falling wedge would actually be reversal point #1 and reversal point #2 if a larger consolidation pattern is going to form. If that is the case, then we’ll need to see one more decline to find the all important 4th reversal point low, which I realize no one wants to hear, but that’s how consolidation patterns form. See the blue consolidation patterns since the 2024 low, where the 3 point double bottom formed.

The extremely bullish case would be if the falling wedge ends up being a standalone consolidation pattern, meaning it would be a halfway pattern dividing the first leg up and the beginning of the second leg up, with the current low being the correction low for the entire first leg up. If that is going to be the case, then we haven’t missed any of the move yet, as the low is just beginning to form. What will this possible current 4th reversal point low look like in a few months or longer from now? If we had a crystal ball, we would know.

The US dollar is going to be the deciding factor in which direction the PM complex is going to go next, as long as the inverse correlation stays in play. Like the H&S top and falling wedge above, which are testing important trend line lows at the moment, so is the US dollar testing an important trend line. We got the breakout above the top trend line of the July 2025 five point expanding triangle, with the critical backtest now underway. If the backtest fails to hold support around the 100.75 area, then we would see a false breakout/bull trap, and the price action could decline very quickly, which generally happens after a false breakout.

So the moment of truth is now at hand from a Chartology perspective.

I would like to wish everyone a great 4th of July with family and friends. All the best…Rambus

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