The year-end precious metals market's 'peak rally' continues, but a warning about the end of the trend has quietly emerged. Although most analysts are optimistic about gold and silver prices reaching new highs before the end of the year, Avi Gilburt, founder of Elliott Wave Trader, has presented a contrary view in his latest report — this round of precious metal price increases is entering the 'final phase,' and investors need to prepare for a multi-year correction that could begin as early as next year.
Gilburt's core logic is that the current strength of precious metals is not the starting point of a new bull market, but rather the conclusion of a super long cycle. He points out that the starting point of this rally was, in fact, a 'cycle reset' after precious metals underwent years of ETF liquidations and a lack of investor interest in 2015; 'This is not the beginning of a new cycle, but more likely the end of a long upward cycle.' He further predicts that 2026 may become the endpoint of the long-term uptrend for gold and silver and is likely to trigger a sustained multi-year bear market.
The short-term fluctuations in the market have also added some uncertainty to this view. On Tuesday (December 16), gold and silver futures slightly closed lower, giving back the gains triggered by the unexpectedly high U.S. unemployment rate in November. Data shows that the U.S. unemployment rate climbed to 4.6% in November, the highest level in over four years, while retail sales in October stagnated. Although the data performance was weaker than market expectations, it did not reach the level of 'extremely weak', which casts further uncertainty on the Federal Reserve's rate cut path next year—whether a higher unemployment rate is sufficient to support the Fed in continuing to cut rates next year, thus affecting the allocation demand for precious metals by safe-haven funds, has become the core point of divergence in the current market.
As Mizuho analyst Robert Yawger said: 'The U.S. unemployment rate has risen to a four-year high of 4.6%, but whether this level of weakness can prompt the Fed to cut rates again in January is still hard to conclude.' Against this backdrop, investors' attention has turned to this week's key data: the November Consumer Price Index (CPI) to be released on Thursday, and the Personal Consumption Expenditures Index (PCE) to be released on Friday. These two major inflation data points will directly influence the market's expectations for Federal Reserve policy, thereby affecting the short-term trend of precious metals.
From the price performance perspective, precious metals are currently still in a high range. The settlement price of the near-term gold futures contract for December delivery on the New York Mercantile Exchange slightly fell by 0.05%, reporting at $4304.50 per ounce, though it ended a three-day winning streak, it still held above the $4300 mark; during the same period, the settlement price of the near-term silver futures contract fell by 0.4%, to $62.70 per ounce, both maintaining the third highest settlement price level of the year. Under high-level fluctuations, Gilburt's 'end of the cycle theory' undoubtedly sounded a warning bell for this year-end precious metal frenzy.
