The end of the bull market or just a pause for precious metals?
Geo Chen
· Fidenza Macro
· February 10, 2026 at 13:42
· ⏱ 6 min read
| Read on Substack ↗
Summary
=== SUMMARY ===
•The recent, violent selloff in precious metals is likely a mid-cycle correction within a secular bull market, not a permanent top. The 2006 price action is presented as a historical analog, suggesting a period of consolidation (months to a year) before the uptrend resumes.
•A new secular US Dollar bear market is underway, driven by geopolitical factors (de-dollarization, erosion of trust in US-held reserves) and monetary policy. The incoming Fed Chair, Kevin Warsh, is expected to be more dovish than the market perceives, cutting rates more aggressively and putting further downward pressure on the dollar.
Summary
The recent 25% collapse in precious metals is likely a correction within a longer bull market, not a permanent top, because the structural drivers – dollar weakness, central bank de-dollarization, and geopolitical de-trust in US assets – remain intact. The author uses the 2006 gold correction as an analog, expecting sideways action for months to a year before resumption, and sees eventual upside for gold and silver.
•Gold experienced a 25% collapse after a parabolic rise on Jan 30, 2026, but the author views this as a correction within a secular bull market, citing the 2006 analog where gold corrected 25%, traded choppily for over a year, then rallied from 730 to 1900 by 2011.
•The structural drivers for gold include a secular dollar bear market (DXY fell from 120 in 2002 to 72 in 2008) and Asian central bank reserve diversification – echoes today with China cutting Treasury holdings and accumulating gold.
•Gold’s share of global reserves bottomed around 10% in 2000‑2020, began rising after Covid, accelerated after Russia’s Ukraine invasion, and the author expects it to return to 50%+ (1970s levels), implying the bull market is only halfway through.
•Kevin Warsh’s appointment as next Fed chair was cited as the catalyst for the selloff, but the author argues Warsh will face material constraints on shrinking the Fed balance sheet due to repo market dysfunction, while being able to cut rates more aggressively than the market prices (terminal 3.10% → 2.50%), which would weaken the dollar and support gold.
•The author points to declining US inflation indicators (Variant Perception leading indicator rolling over, Truflation PCE nose-diving) as supportive for rate cuts and gold upside.
•The article’s investment thesis is directional support for gold and silver but warns of a wide choppy range for months to a year before resolving higher; specific trading plans are behind the paywall.