Bullish Falling Wedge Completes in the Precious Metals Complex

It was almost exactly six months ago today, on February 2nd, that I put the Precious Metal Stocks Trades Portfolio back to 100% cash after an important measured-move price objective was reached on most of the precious metals complex. It’s easy to forget just how bullish PM stock investors were at the all-time highs, to step away from the party, and go to cash waiting for the next opportunity to present itself, took right at six months.

For the last several months, there were two distinctly different patterns we’ve been following, one was a possible H&S top and the other was the bullish falling wedge. Both patterns refused to show their hand until yesterday. The bullish falling wedge was forming a small inverse H&S bottom at the 6th reversal-point low we’ve been following for several weeks, waiting to see if it would complete. If it did, that would be our signal that the bullish falling wedge would complete as the next consolidation pattern within this once-in-a-lifetime rally that actually began back at the 2022 low.

We began the accumulation process yesterday when the small inverse H&S neckline gave way and added more positions today on that massive breakout gap above the top rail of the six-point bullish falling wedge. What’s likely to happen next is a possible backtest to the top trend line of the falling wedge to confirm the breakout.

Let’s start with a combo chart, which has the GDX on top with the BPGDM on the bottom. At the January/February double-top high, we saw a divergence between the GDX on top and the BPGDM on the bottom, which was another important signal a top of some importance was likely being made, as shown by the red arrows.

We’ve been following another divergence down at the bottom, where the GDX was making lower lows in its falling wedge, but the BPGDM was making higher lows. Today, the divergence came to an end when the GDX gapped above its falling wedge, as shown by the green arrows.

Next up is the daily chart for the CDNX, Canadian Venture Index, where many of the small and micro-cap PM stocks reside. After gapping above the horizontal dashed line at the previous low at reversal point two, I tweaked the bottom trend line, which now shows the falling wedge vs. the downtrend channel.

It’s still lagging the other precious metals stock indexes, but it’s now gaining ground. Confirmation the falling wedge is a bullish falling wedge will be when we see the breakout above the top trend line.

Next is the longer-term weekly chart showing the double H&S bottom, which led to the epic rally into the January 2026 high, where the falling wedge has materialized. The CDNX found support between the two previous support and resistance lines, forming a zone of support between 815 and 910, which is holding.

When we look at the history chart for the CDNX, you can see how the current blue falling wedge fits into the big picture. I’m always amazed at how a chart can form some beautiful symmetry. When the CDNX topped out in February of 2021, six months after the rest of the PM complex, it formed a 5-point bearish falling wedge reversal pattern to the downside. The current blue falling wedge, which began forming at the January 2025 high, is forming a similar falling wedge, but this one will most likely be a bullish falling wedge to the upside. I connected the two highs and drew in a potential neckline, which, if it plays out, will show a larger inverse H&S bottom, with the double H&S bottom on the chart above being just the head portion.

Let’s take a look at the 30-minute chart for the HUI, which shows the now bullish falling wedge with a triple breakout of the two necklines, and today the top rail of the six-month bullish falling wedge. I recently pointed out how the bottom trend line held support for both the left and right shoulder low, with the head forming on that small false breakout / bear trap below the bottom trend line at the critical 6th reversal-point low. Today you can see the massive breakout move above the top trend line.

This next daily combo chart I just threw together today, without all the smaller internal chart patterns, which created this six-month bullish falling wedge. I had just enough time to show the triple breakout on the HUI, which doesn’t show gaps. The rest of the charts show the breakout gap yesterday above the neckline and today’s big breakout gap above the top trend line of the falling wedge, which is classic Chartology. Now it’s time to look for a backtest to the top trend line, which generally happens roughly 75% of the time, but no guarantee. On a short-term relative basis, the silver area is still underperforming the rest of the PM complex, as it still hasn’t cleared the top trend line yet.

We’ve been following the now bullish falling wedge from the weekly perspective, which takes out all the noise from the shorter-term daily charts. On the left side of the charts on the GDM, gold stock index, was the last rally leg into the 2026 all-time high. There were two measured-move price objectives. The first one is shown by the blue arrows and the second into the all-time high, as shown by the black arrows.

Once that leg of the impulse move was completed, I strongly suggested that we could see a larger consolidation pattern form that was bigger than any of the previous ones because of the magnitude of the rally.

What many chartists don’t understand about a trading range is that a consolidation pattern will have an even number of reversal points: 4, 6, 8, or more, and a reversal pattern will have an odd number of reversal points: 3, 5, 7, or more. At the January 2025 low, that double bottom had 3 reversal points, making it a reversal pattern to the upside. Note the next two blue consolidation patterns, which have four completed reversal points before the breakout. This week, the current bullish falling wedge just completed the 6th reversal-point low, creating the new and larger consolidation pattern.

There are still two more days of trading for this week, but another important clue the tide has turned in favor of the bulls is the price action is now strongly testing the 30-week EMA, which does a good job of holding support during a strong impulse move.

Another thing few chartists don’t recognize is that a line chart can oftentimes show you a breakout before a bar chart does on a daily or weekly basis. Yesterday, I posted a very short update pointing out that the weekly line chart was showing the breakout, while the price action on the bar chart was still relatively far behind. When you compare this weekly line chart below to the weekly bar chart above, you can clearly see how much higher the price action is above the top trend line on the line chart vs. the bar chart.

Yesterday, when the GDX broke out from its small inverse H&S bottom at the 6th reversal-point low, I was a bit concerned that I didn’t see the volume rise much, but that changed today with that massive breakout gap above the top trend line on a big increase in volume to go along with the divergence on the RSI. The only question I have right now is if we’ll see a backtest to the top trend line.

This next chart for the GDX puts the current bullish falling wedge into perspective. Before the really large part of the rally began in 2024, there were a couple of multi-year big bases we were following, which gave the GDX the energy it needed to produce a once-in-a-lifetime rally.

One of the bases was the 2022 six-point triangle. The rally after the breakout gap, which was somewhat muted as far as a strong impulse move is concerned, came to an end at the first reversal point on the black bullish rising wedge halfway pattern. Whenever you see a rising wedge or flag that slopes up in the direction of the rally, and the breakout comes to the upside, it tells you the rally is very strong. You can think of a bullish rising wedge as a running correction, which gives the indicators time to reset, but the price action keeps moving higher until the actual breakout.

The black arrows measure the bullish rising wedge as a halfway pattern, which had a price objective up to the 87.50 area, where the blue triangle consolidation pattern formed the next halfway pattern. The blue arrows measure the price-objective for the triangle halfway-pattern up to the 120.90 area, where the 2026 high was reached.

Now we can take it another step forward using the current 2026 bullish falling wedge as the next halfway pattern to show where the next rally-phase high may form, as shown by the red arrows.

This weekly chart for the GDXJ shows the other big base we were following, which led up to the massive rally we’ve been experiencing, which was the multi-year H&S consolidation pattern. The blue arrows measure the blue triangle as the halfway pattern, which had a price objective up to the 155 area, which suggested that leg had become exhausted, and it was time for a rest to consolidate those gains and get ready for the next leg higher, which we could now be starting.

Another important reason that the correction low is very likely in place is we can look to the long-term monthly chart for gold. This long-term monthly chart goes back to the 2008 crash low, where the very symmetrical H&S consolidation pattern formed, which gave gold enough energy to put in its 2011 all-time high back then. The bear-market low formed the multi-year H&S consolidation pattern, which was the base to launch the current leg of the secular bull market, which began at the 2000 low.

From the 2022 low at the last reversal point in the 2020 bullish flat-top expanding triangle is where the real fireworks began, but keep in mind this rally phase has taken four years to reach the 2026 high. During the impulse move out of the 2020 bullish flat-top expanding triangle, gold formed three small blue consolidation patterns, which are healthy developments, which give life to the impulse move.

The most important aspect of this long-term monthly chart is the red 10-month and blue 20-month EMA, which show long-term support during bull cycles. When you see the moving averages crossing above or below the price action, you know you’re in a trading range. Two months ago, we lost the red 10-month EMA for the first time since the breakout from the flat-top expanding triangle. The longer and more important moving average of the two is the 20-month EMA. So far, we are now beginning to see a nice bounce off the 20-month EMA, which tells us the bull market is still intact.

The red circles show the percentage width of each large trading range with gold’s current 30% decline being pretty normal.

Next is a long-term monthly combo chart we’ve been following for many years, which shows the 2011 H&S consolidation patterns on both silver and gold. Most people think that big patterns like this aren’t authentic and not to be trusted, but we know big patterns like that are valid, and the best way I know to predict the further price action in the long term.

Even though silver’s neckline slopes down and gold’s up, suggesting gold’s H&S consolidation pattern is stronger than silver’s, they both broke out above their respective necklines at the same time, reaching their minimum price objective, as shown by the black arrow.

After such massive bases, it stands to reason that a large multi-year rally should be in the cards. Since the 2026 all-time high, note how the blue falling wedge on silver and gold looks as the next consolidation pattern in the ongoing secular bull market. Both are also finding important support on their red 20-month EMA.

This last chart for tonight is a daily combo chart which has the US dollar on top with the GDX on the bottom. IMHO this is the most important chart for the PM complex. Up until the early part of July, the US dollar was respecting the top trend line of the July 2025 expanding triangle, which I was thinking would be a consolidation pattern to the downside, but that all changed when the price action broke out above the top trend line, throwing doubt in my mind: could the US dollar be heading higher, and what’s that going to do to the PM complex?

After a backtest to the top trend line, the US dollar rallied again, but this time making a slightly lower breakout high, which, as it stands right now, is a double-top false-breakout bull-trap reversal pattern. Last week, when the US dollar showed that breakout below the double-top trend line, the GDX didn’t do much, but today that all changed with that massive breakout gap, completing the bullish falling wedge.

Since the initial low in the bullish falling wedge back in June, the price action had been chopping sideways, showing no signs of which direction the next important move was going to take, but that all changed this week. Finally, we have clarity, and now can focus on the next leg higher. All the best… Rambus

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