Gold, silver, and copper will all "consolidate" in the coming weeks! JPMorgan Chase: This is just a rest in the bull market, with copper possibly rebounding first in the second quarter.

After experiencing several months of unilateral gains and fervent pursuit, the global metal market seems to have hit a "ceiling". Faced with the recent sharp price fluctuations, J.P. Morgan, the top investment bank on Wall Street, issued a clear signal in its 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 is not the end of the bull market. According to Jason Hunter, an analyst at J.P. Morgan's global market strategy team, the current adjustment is a necessary rest period in the long-term upward trend. He stated that for savvy traders, the key point of the game is "differentiation": compared to the typical "rise and fall" pattern of gold, base metals (especially copper) benefit from the support of the global manufacturing cycle, with a more solid fundamental logic, and are expected to rebound ahead of gold in the second quarter. Gold: From "parabolic" to "wide-ranging oscillations" "We believe the recent price movement of gold is a typical short-term reversal after a parabolic rise, rather than the end stage of a long-term uptrend," wrote J.P. Morgan's technical strategist Jason Hunter in the report. Hunter stated that the technical charts show that gold prices have shown clear signs of waning momentum after experiencing a parabolic rise. He predicts that gold prices will form a wide-ranging oscillation "holding pattern" in the coming weeks or even months. During this period, the $5000 mark and the $5100-5150 range will form strong resistance, limiting the short-term rebound space for gold. Although facing a technical correction in the short term, the core logic supporting the gold bull market - the theme of "debasement" - remains intact. The report specifically points out that the U.S. dollar index (DXY) continues to run below the 100 level, which is a key long-term weakness signal. As long as the dollar remains below this level, the market is susceptible to the resumption of the downward trend that began in early 2025. Additionally, the S&P 500 index/gold ratio recently broke through a decade-long support level, which is highly similar to the market structure at the end of the 1970s, implying that the long-term trend of funds flowing into hard assets is far from over. Therefore, the current decline is not a trend reversal, but a "mid-term rest" to digest the rapid rise in the previous period. Copper's "expectation gap": The truth behind the PMI data Unlike gold's safe-haven properties, copper's trend is more influenced by the global economic cycle. Recently, LME copper prices decelerated after reaching above $14000, causing concerns in the market about whether copper prices have "deviated from fundamentals". J.P. Morgan found through regression analysis that the current year-on-year increase in copper prices implies that global manufacturing PMI should be around 53. However, the actual PMI reading is only around 50.5. On the surface, copper prices seem overly optimistic, overshooting future growth. However, J.P. Morgan's strategists provide a different interpretation through cross-asset comparison - this is not an irrational boom in copper, but a collective bet on cyclical recovery in the market. The report cites "semiconductor stocks" as a reference. These assets are typically highly correlated with the manufacturing industry cycle and less influenced by the theme of "debasement". Data shows that the price movement of semiconductor stocks also implies that PMI will rise to around 52 by the end of the first quarter of 2026. "This cross-market background enhances the effectiveness of traditional technical analysis," Jason Hunter said. Since both semiconductors and copper are pricing in a stronger manufacturing cycle, the logic of cyclical rotation is deeply rooted across asset categories. Hunter believes that the current correction in copper prices is more of a technical correction rather than a collapse in fundamental expectations. Differentiated strategies: "Strong copper, weak gold" in the second quarter Based on the above logic, J.P. Morgan has made predictions on the market rhythm in the coming months: during the consolidation period, base metals will receive more support than precious metals. Although both need to consolidate, there are differences in market DRIVE. Gold is currently mainly constrained by crowded trades and profit-taking in the "debasement" trading; while copper, in addition to benefiting from the devaluation logic, also has additional strong momentum from the "cyclical rotation". Although LME copper showed a decelerating trend after reaching the mid-term target of $14000-14596, it did not show a drastic "reversal" signal like gold. J.P. Morgan predicts that this cyclical momentum will help copper and base metals continue to rise "earlier" than precious metals in the second quarter after the consolidation period ends. To cope with the upcoming consolidation period, J.P. Morgan advises investors to focus on specific tactical support levels. For copper, the $12074-12105 range is expected to provide initial bottom support and is an ideal position for short-term games; while the $11100-11200 range is the breakthrough position of the multi-year trading range, and as long as the price remains above this range, the long-term bullish structure remains solid. In contrast, buying gold requires more patience. Strategists recommend first focusing on $4500 (50-day moving average), but the more critical buying range is $4264-4381 - this is the breakout area from the fourth quarter of 2025 and is expected to provide stronger support. In addition, Brent crude oil is also expected to maintain range oscillation. The uptrend driven by geopolitical factors is facing resistance at the "high end of $60", and it is expected to be difficult to sustainably break through $70. However, the intense moving averages in the $61.75-62.18 range will provide solid bottom support for oil prices. In simple terms, the conclusion of J.P. Morgan's report is: the metal party is on pause, but the music has not stopped. During this "halftime" phase, chasing gold blindly may face months of choppy turmoil. On the other hand, focusing on signals of cyclical recovery in the manufacturing industry and strategically positioning in base metals at technical support levels may be the best strategy to capture the next wave of upward trends. This article is reproduced from "Wall Street Seen", written by Gao Zhimou; GMTEight editor: Xu Wenqiang.