<div>Today, we see strong evidence that the precious metals sector's bottom is in. Not only that, the downside risk now looks minimal, and the next major upleg looks set to begin soon, even imminently.</div>
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<div>The biggest giveaway that the sector bottom is in is sentiment, which we can track via the Gold Miners Bullish Percentage Index, which hardly anyone seems to use, despite the fact that it is a very reliable guide.</div>
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<div>We will start with a 3-year chart for this sentiment index.</div>
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<div>It shows that EVERYONE was bullish on the sector by the end of January when it reached 100% bullishness, which of course marked a top. </div>
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<div>However, after the late January to early February plunge — mostly triggered by the raising of margin requirements — the Bullish Percentage Index collapsed back to a dismal reading of 4% by mid-March. That marked an important low.</div>
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<div>The initial bounce off this low brought the reading back up to 50%, which was too much too soon, so again, not surprisingly, GDX dropped back quite steeply over the past week or so.</div>
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<div>Interestingly, this has brought the % bullish back to the very low level of 11.5% — not as low as the 4% in March but still a healthy reading suggesting that the sector is late in the intermediate base building process. </div>
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<div>In the chart below, observe the reading at the start of 2025, just before last year's massive sector rally and the rally into this year:</div>
<div><img src="https://www.moneymetals.com/uploads/content/bpgdm3year030526–1-.jpg" width="800" height="1009" class="mx-auto p-3" alt="" /></div>
<div>Ahead of this big uptrend, the sentiment reading was already at 40% bullish. Now it is at a meager 11.5%, so the upside potential from here is massive – and this low reading also means that the downside from here is probably very limited.<br /><br />It’s also worth examining the longer-term 10-year chart for this sentiment index, which shows how reliably it has correlated with tops and bottoms repeatedly in the past. </div>
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<div>The paired red circles show the sentiment readings at the tops, and the paired green circles show the sentiment readings at the bottoms. The “so low it's silly” reading in mid-March very probably marked the low for this correction, ranking as it does with the lowest readings of the past 10 years, and currently it is still at a historically low level. </div>
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<div>Put simply, this means big upside potential and very limited downside.<img src="https://www.moneymetals.com/uploads/content/bpgdm10year030526–1-.jpg" width="800" height="993" class="mx-auto p-3" alt="" /></div>
<div>So, how does the 1-year silver chart look now?</div>
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<div>We did see something of a reaction back after it broke down from the bearish Rising Wedge in the middle of April, as expected, but the reaction has been shallow, also as expected. </div>
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<div>Meanwhile, silver has started higher again over the past couple of days. It looks like it is ready to break out of a curved pennant pattern that formed from the January highs. This <a href="https://www.moneymetals.com/news/2026/04/23/silver-prices-rose-even-as-demand-slipped-004858">intermediate correction</a> brought the price back to strong support above the rising 200-day moving average and above the very strong support near the upper boundary of the <a href="https://www.moneymetals.com/silver-price">gigantic 45-year Cup & Handle holding pattern</a> that it decisively broke out of last Fall. </div>
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<div>That was a perfect place for it to form a base, which it has been doing, before embarking on a 2nd major upleg that should be as big and probably bigger than the 1st one following the breakout. </div>
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<div>It should also be noted that the consolidation following this next major upleg is unlikely to give back as much of the gains as happened following the 1st upleg, which was a typical post-breakout reaction, as it will have completely escaped the “granitional pull” of the giant Cup & Handle pattern.</div>
<div><img src="https://www.moneymetals.com/uploads/content/silver1year030526–1-.jpg" width="800" height="999" class="mx-auto p-3" alt="" /></div>
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<div>Critics say, “Silver’s done — that was a parabolic blowoff top in January, and they are always followed by a bear market.” </div>
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<div>I counter that the massively overbought condition that had developed by then was a “momentum punch” in which silver celebrated breaking out above the resistance at the top of its giant 45-year Cup & Handle pattern. This momentum suggests silver has begun a major bull market destined for much higher, currently unimaginable levels.</div>
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<div>Now we come to the question of timing – when is this next major upleg likely to start? </div>
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<div>Below is a chart which suggests that the answer to this question is “Immediately – if not sooner.” I refer to the 7-month silver-over-gold ratio chart.</div>
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<div>On this chart, we see that, following the steep plunge in the ratio late in January and early in February, a fine Symmetrical Triangle has formed above the <a href="https://www.moneymetals.com/news/2026/04/20/silver-price-surged-last-year-despite-modest-drop-in-demand-004851">rising 200-day moving average</a>. </div>
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<div>With the ratio pushing towards the apex of this Triangle, resolution, meaning a breakout, looks imminent and the strongly bullish alignment of moving averages coupled with the still very low reading of the Gold Miners Bullish % Index shown at the top of this chart and steadily improving momentum (MACD) all point to an upside breakout by this ratio – and therefore by silver and everything else, gold and PM Sector ETFs and stocks.<img src="https://www.moneymetals.com/uploads/content/silverovergold7month030526–1-.jpg" width="800" height="997" class="mx-auto p-3" alt="" /><br />I believe we can now confidently buy the sector across the board, expecting it to take off higher quickly as traders move off the fence and pile in.</div>
