Gold's bear market may be ready for a comeback, Katie Stockton says

Gold has been in a bear market since January, and the technical picture is now showing signs of a turnaround, CNBC reported.

Katie Stockton, founder and managing partner of FairLead Strategies, told CNBC Pro on Tuesday that the SPDR Gold Shares ETF (GLD) has stabilized above support near $360 after a brief breakdown that failed to confirm. That failed breakdown is the kind of move technical analysts call a shakeout, where price dips below a support level and then quickly recovers, trapping sellers who bet on further declines.

The setup supports a counter-trend rally within the prevailing downtrend. Stockton identified initial resistance in the $405 to $410 zone, defined by the weekly cloud model and the 200-day moving average. That is roughly 7 percent above current levels, giving the trade a defined target if the momentum holds.

A new daily MACD buy signal flashed on Tuesday, providing the catalyst. MACD, or moving average convergence divergence, is a momentum indicator that tracks the relationship between two moving averages of price. A buy signal occurs when the MACD line crosses above its signal line, suggesting that short-term momentum is improving. The signal follows weeks of decline that pushed gold to its lowest levels of the year.

The weekly stochastic oscillator is also positioned to turn higher from oversold territory. Stochastics measure where price closes relative to its recent range. A reading below 20 is considered oversold. When the oscillator turns up from that zone, it can signal that selling pressure is exhausting. Stockton said that if upside follow-through materializes, the weekly stochastic would provide early evidence of an intermediate-term low in GLD, aligned with the price action in gold futures.

Beyond the price chart itself, Stockton pointed to the ratio of GLD to the SPDR S&P 500 ETF Trust (SPY) turning higher from support. The weekly stochastic for that ratio is rebounding from oversold territory. Improved momentum behind GLD relative to SPY supports outperformance by gold versus U.S. equities, which is a risk-off signal. When gold starts beating stocks on a relative basis, it often reflects investors rotating toward safe-haven assets and away from risk.

Gold’s bear market has been one of the quieter market stories of 2026. After reaching record highs in late 2025 and early January, the metal has declined steadily as real yields rose and the Federal Reserve signaled a more hawkish stance. The drawdown has been gradual enough that it has not generated the headlines that equity selloffs produce, but it has erased a significant portion of gold’s gains from the prior year. Investors who bought near the top have been sitting on losses for 10 months with little relief.

The counter-trend rally thesis depends on the support holding. If GLD breaks below $360 on a confirmed basis, the false breakdown interpretation is wrong and the bear market resumes with the next support level much lower. Technical analysis is probabilistic, not predictive. Stockton’s read is that the odds favor a rebound, but the trade invalidation level is clear. That discipline is what separates technical analysis from gambling: you have a level where you are wrong, and you get out.

The broader context matters. Gold’s decline has coincided with a stock market that keeps grinding higher, driven by AI spending and strong earnings. If the equity rally falters, gold becomes the natural beneficiary. The GLD-to-SPY ratio turning higher from oversold is the earliest signal that the rotation is starting. It does not mean the rotation will complete, but it means the conditions for it are in place.

What I think

The technical case for a gold rally is sound, but technical signals work best when they align with the macro backdrop. Right now the backdrop is mixed. Gold’s bear market has been driven by rising real yields and a hawkish Fed. If the October CPI report that came in hot on Tuesday pushes the Fed to hike again in December, as fed funds futures now suggest, real yields go higher and gold’s headwinds intensify. A MACD buy signal against that backdrop is a counter-trend trade fighting the macro current.

The GLD-to-SPY ratio is the more interesting signal. Gold has been underperforming stocks for most of 2026, and a turn in that ratio would mean the rotation is starting. Equity markets are priced for a soft landing and continued earnings growth. If inflation runs hot enough to force another rate hike, the equity story gets harder to tell and gold becomes the safer place to be. The ratio turning from oversold is the market starting to price that possibility.

Stockton’s framework is disciplined. She has a defined support level, a defined resistance zone, and a clear invalidation. That is how technical analysis should be used: as a risk management tool, not a crystal ball. The false breakdown at $360 is a classic shakeout pattern, and those tend to produce sharp reversals when they work because the sellers who were trapped have to buy back in. A 7 percent rally to the $405 to $410 zone is a reasonable target if the momentum holds.

The risk is that gold’s bear market is not over. Bear markets produce counter-trend rallies that fail, and each failure lowers the ceiling. If this rally stalls below resistance and rolls over, the next leg down could take GLD well below $360. The stochastic and MACD signals would reset, and the bear market would continue with even more technical damage. That is the scenario the bulls are betting against, and it is the one the bears are waiting for. The only honest answer is that the next few weeks of price action will tell us which scenario is playing out.