The one-way rally in precious metals has temporarily paused. According to a report released on Thursday by JPMorgan technical strategist Jason Hunter and his team, while the foundation for a long-term bull market remains solid, technical patterns indicate the market has formally entered a consolidation phase following recent significant volatility. The bank anticipates that gold will form a wide trading range, potentially lasting several months, fluctuating above a support level of $4,264-$4,381 and below a resistance level of $5,100-$5,150. The report also noted that the US Dollar Index hovering below the 100 level, coupled with the trajectory of the S&P 500/Gold ratio, suggests the long-term "currency debasement trade" is not yet over. The current consolidation in precious metals represents a pause within a bull market, not a bearish reversal.
**Gold: Short-Term Consolidation, Long-Term Bullish Thesis Unchanged** JPMorgan's technical team analysis suggests recent gold price action shows characteristics of a short-term "exhaustion" reversal, often a precursor to a consolidation period, but this is by no means the end of the long-term advance. From a tactical perspective, gold prices are expected to undergo a necessary period of consolidation before challenging the significant $5,100 level. Investors should monitor key technical levels to define the trading range: On the downside, initial pullbacks will test medium-term support, particularly the 50-day moving average around the 4500 level, and the Q4 2025 pattern breakout zone in the $4,264-$4,381 area. On the upside, rebound momentum is expected to fade near the 5000 level, with stronger resistance situated in the $5,100-$5,140 band.
The report emphasized that, based on long-term price patterns and comparisons similar to the end of the late-1970s currency debasement cycle, the long-term currency depreciation cycle is not complete. This implies the bull market foundation remains intact, and the current consolidation is more about building energy for the next leg higher.
**Copper: Pullbacks Viewed as Buying Opportunities** Compared to precious metals, JPMorgan believes base metals will demonstrate greater resilience. Although LME copper prices show signs of fatigue and a decelerating pattern after reaching the medium-term target zone of $14,095-$14,596, pro-cyclical sector rotation is expected to provide support. Technically, as the market enters consolidation, initial support is anticipated in the $12,074-$12,105 area. A more critical medium-term support lies at $11,100-$11,200; as long as trading sustains above this multi-year range breakout zone, the long-term bullish trend remains intact.
Notably, regression analysis in the report indicates part of copper's surge was driven by "currency debasement flows," with the implied global manufacturing PMI expectation (approximately 53) being significantly higher than the actual reading (around 50.5). While copper prices might slightly overestimate the strength of the cyclical recovery, the integrity of the pro-cyclical trend suggests substantial buying interest will emerge during price dips.
**Macro Driver: Weak US Dollar Underpins Long-Term Bull Case** The core support for the long-term bullish thesis on commodities continues to stem from the foreign exchange market. The US Dollar Index experienced sharp fluctuations after attempting to break below its second-half 2025 support level in late January and remains confined within a well-defined range. JPMorgan highlighted the key point that the Dollar Index has primarily traded below the crucial long-term inflection point of 100 over the past eight months. As long as prices persist below this level, the market remains susceptible to resuming the downtrend that began in early 2025. This weak dollar environment will continue to support the long-term bullish logic for precious metals and commodities.
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