Gold, silver, and copper will all "consolidate" in the coming weeks! JPMorgan: This is just a bull market correction, and copper may rebound first in the second quarter.

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After months of one-sided rallies and frenzied chasing, the global metals market appears to have hit a “ceiling.” In response to recent sharp price fluctuations, Wall Street’s top investment bank, J.P. Morgan, issued a clear signal in a technical strategy report released on February 5: Major metals such as gold, silver, and copper will all enter a “consolidation period” in the coming weeks.

However, this does not mark the end of the bull market. According to Jason Hunter, analyst at J.P. Morgan’s Global Markets Strategy team, the current adjustment is a necessary rest within a long-term upward trend.

He stated that for astute traders, the key game is in “differentiation”: Compared to gold’s typical “spike then pullback” pattern, base metals (especially copper) benefit from support by the global manufacturing cycle, have a more solid fundamental logic, and are expected to rebound ahead of gold in the second quarter.

Gold: From “Parabolic” to “Wide Oscillation”

“We believe the recent gold price action is a classic short-term spike and pullback reversal, rather than the final stage of a long-term uptrend,” wrote J.P. Morgan technical strategist Jason Hunter in the report.

Hunter said technical charts show that after a parabolic rally, gold’s momentum has shown clear signs of exhaustion. He predicts gold prices will form a wide-range oscillatory “holding pattern” in the coming weeks or even months. During this period, the $5,000 threshold and the $5,100–5,150 region will provide heavy resistance, limiting gold’s short-term rebound potential.

Despite facing a technical pullback in the short term, the core logic supporting the gold bull market—the “debasement” theme—remains intact. The report specifically points out that the U.S. Dollar Index (DXY) continues to run below the 100 mark, which is a key long-term weak signal. As long as the dollar stays below this level, the market remains susceptible to the resumption of the downward trend starting from early 2025.

In addition, the recent S&P 500/gold ratio has dropped below its decade-long support level, which closely resembles market structures in the late 1970s, suggesting the long-term flow of capital into hard assets is far from over.

Therefore, the current decline is not a trend reversal, but a “half-time break” to digest the earlier rapid gains.

The “Expectation Gap” in Copper: The Truth behind PMI Data

Compared to gold’s safe-haven status, copper’s trend is far more constrained by the global economic cycle.

Recently, LME copper prices slowed after surpassing $14,000, sparking concerns in the market about whether copper prices have “diverged from fundamentals.”

J.P. Morgan’s regression analysis found that the current year-on-year copper price increase implies a global manufacturing PMI of around 53. However, the actual PMI reading is only around 50.5.

On the surface, copper prices seem overly optimistic, pricing in future growth in advance. But J.P. Morgan’s strategists, through cross-asset comparison, provide a different interpretation—this is not an irrational copper boom, but rather the market making a collective bet on pro-cyclical recovery.

The report uses “analog semiconductor stocks” as a reference. Such assets are typically highly correlated to the manufacturing cycle, and less affected by the “debasement” theme. Data shows that the price trends of analog semiconductor stocks also imply PMI will rise to near 52 by the end of Q1 2026.

“This cross-market background strengthens the validity of traditional technical analysis,” Jason Hunter said. Since both semiconductors and copper are pricing in a stronger manufacturing cycle, the pro-cyclical rotation logic is deeply rooted across asset classes.

Hunter believes the recent copper pullback is mainly a technical correction, not a collapse in fundamental expectations.

Strategy Divergence: “Strong Copper, Weak Gold” in Q2

Based on the above logic, J.P. Morgan predicts the market rhythm for the next few months: During the consolidation period, base metals will receive more support than precious metals.

While both require consolidation, market drivers differ. Gold is currently constrained mainly by crowded “debasement” trades and profit-taking; copper, in addition to benefiting from the debasement logic, additionally enjoys strong “pro-cyclical rotation” momentum.

Although LME copper’s rally slowed after hitting the medium-term target of $14,000–14,596, it has not shown the dramatic “reversal” signals seen in gold.

J.P. Morgan predicts this pro-cyclical momentum will help copper and base metals resume their uptrend “earlier” than precious metals in the second quarter after consolidation ends.

To prepare for the coming consolidation, J.P. Morgan advises investors to watch specific tactical support levels.

For copper, the $12,074–12,105 zone is expected to offer initial bottom support, making it an ideal short-term trading area; $11,100–11,200 marks a multi-year breakout range, and as long as prices remain above this area, the long-term bull market structure remains intact.

In contrast, buying gold will require more patience. Strategists suggest watching $4,500 (50-day moving average) first, but the key buying area is at $4,264–4,381—this is the breakout zone in Q4 2025, which is expected to provide stronger support.

In addition, Brent crude oil is also expected to remain range-bound. Rallies driven by geopolitics are stalling at the “high $60s” and are unlikely to sustain a breakout above $70. However, the densely packed moving averages near $61.75–62.18 will provide solid support for oil prices.

In summary, the conclusion of the J.P. Morgan report is: The metal party is on pause, but the music isn’t over.

In this “half-time break” phase, blindly chasing gold may face months of choppy torment. In contrast, watching the recovery signals of the manufacturing cycle and positioning in base metals at technical support levels may be the best strategy to catch the next wave of the rally.

Risk Disclaimer and Exclusion of LiabilityThe market has risks, investment should be cautious. This article does not constitute individual investment advice, nor does it take into account the unique investment objectives, financial situation, or needs of any individual user. Users should consider whether any opinion, viewpoint, or conclusion in this article fits their specific situation. Investing on this basis is at your own risk. ```