Is the "long bull" trend still ongoing? JPMorgan: Technical indicators show that precious metals will enter a consolidation phase in the coming weeks.

The one-sided rally in precious metals has temporarily come to an end.

According to Chasing Wind Trading Platform, Morgan Stanley technical strategist Jason Hunter and his team released a report on Thursday stating that although the long-term bullish trend remains solid, after recent sharp fluctuations, technical patterns indicate that the market has officially entered a consolidation phase.

The bank expects gold to form a broad trading range that could last for months, with support between $4,264 and $4,381 and resistance between $5,100 and $5,150.

The report also points out that the dollar index lingering below the 100 mark, along with the trend of the S&P 500/gold ratio, suggests that the long-term “currency devaluation trade” has not ended. The current consolidation in precious metals is a pause within a bull market, not a reversal into a bear market.

Gold Short-term Consolidation, Long-term Bull Market Still Intact

Morgan Stanley’s technical team analyzes that recent gold price behavior shows short-term “explosive” reversal characteristics, which often signal the arrival of a consolidation phase, but this is not the end of a long-term rebound.

From a tactical perspective, gold prices will undergo a necessary pause before challenging the 5100 level.

Investors should pay attention to key technical levels to define the trading range:

On the downside, initial rebounds in gold will be tested at medium-term support levels, especially the 50-day moving average at 4500, and the breakout zone in the 4264-4381 area from Q4 2025 pattern.

On the upside, rebound momentum is expected to weaken around 5000, with stronger resistance at the 5100-5140 zone.

The report emphasizes that, combined with long-term price patterns and comparisons to the end of the currency devaluation cycle similar to the late 1970s, the long-term currency devaluation cycle is not yet complete. This means the bull market foundation remains, and the current consolidation is more about building momentum for the next move.

Copper: Pullback as a Buying Opportunity

Compared to precious metals, Morgan Stanley believes base metals will show greater resilience. Although LME copper prices have shown signs of fatigue after reaching the mid-term target of 14095-14596 and forming a slowdown pattern, cyclical rotation will support it.

On the technical side, as the market enters consolidation, the first support is expected around 12074-12105. A more critical medium-term support lies between 11100 and 11200. As long as trading remains above this multi-year breakout zone, the long-term bullish trend remains intact.

It’s worth noting that the report’s regression analysis indicates that the surge in copper prices was partly driven by “currency devaluation capital flows,” with implied global manufacturing PMI expectations (around 53) significantly higher than actual readings (around 50.5). While copper prices may slightly overestimate the strength of the cyclical recovery, the integrity of the pro-cyclical trend suggests that during a pullback, copper will attract substantial buying interest.

Macro Drivers: Weak US Dollar Supports Long Bull

The core support for the long-term bullish logic of commodities still comes from the forex market. After attempting to break through the support level in the second half of 2025 in late January, the dollar index experienced sharp fluctuations and remains confined within a clear range.

Morgan Stanley points out that the key is that the dollar index has mainly traded below the critical long-term inflection point of 100 over the past eight months.

As long as prices stay below this level, the market is prone to resume the downtrend that began in early 2025. This weak dollar environment will continue to support the long-term bullish case for precious metals and commodities.

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Market risks are inherent; investments should be cautious. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Invest at your own risk.