Gold and silver’s bearish signals mask a deeper inflation-driven momentum that keeps the bull market alive

Gold and silver issued bearish engulfing signals on the monthly chart in March, warning of short-term weakness just as the bull market stalls. The pattern — where prices open higher but close lower — suggests momentum has shifted. For gold, this reversal followed a peak at the end of January 2026, coinciding with U.S. and Israeli military actions against Iran. The last time such a signal appeared, in April 2022, prices fell from $2,000 to $1,600 and declined for six straight months. This time, the setup is different. Despite the technical setback, underlying demand remains intact, supported by central bank buying and structural inflation pressures. Silver sales also cooled: Perth Mint sold 976,450 ounces in March, less than half the nearly 2 million ounces moved in February, when investors capitalized on early-year weakness. U.S. Mint American Eagle sales dipped to 1.6 million ounces from 1.7 million. Yet retail demand for silver is stronger year-to-date, with over 12.7 million ounces sold in Q1 — more than double the 5.3 million sold in the same period of 2025. Central banks continue to accumulate gold, netting 27 tons in February, up from 5 tons in January. Poland alone added 20.2 tons, the most since February 2025. Uzbekistan and Kazakhstan added 7.8 and 7.7 tons, respectively. Turkey and Russia sold 8.1 and 6.2 tons, but the broader trend remains one of accumulation — a pattern in place since the global financial crisis and reinforced by last year’s 863-ton net purchase. Heraeus analysts expect consolidation to last up to six months, but not a reversal of the bull market. Inflation is still rising, real interest rates are falling, and the Federal Reserve faces conflicting mandates: employment data, while showing a 178,000 gain in March, has been revised downward for 11 of the past 12 months by an average of 51,000. If growth slows further, the Fed may cut rates in 2026 — a scenario that would reignite precious metals. For now, if the recent price rise falters, gold’s next support sits near the March low of $4,100 per ounce.