Gold has shed roughly 30% from its highs and is now trading near $4,000 per ounce, well below the levels that defined its recent rally. The drawdown is steep, but it lands almost exactly on the average year-to-date path gold traced during the last two midterm years, 2022 and 2018, and the timing of those prior lows clustered in the August to September window.
Why it matters
The pattern is structural rather than coincidental. In 2022 gold bottomed in late September after a 22% drawdown; in 2018 it bottomed in mid-August after a deeper slide. Going back further, the 2008 cycle saw roughly a 34% peak-to-trough correction, and 2006 produced a 26% drop. Midterm years have consistently delivered the year's weakest returns for precious metals, then handed the trend back to bulls into the pre-election year. Right now gold sits about 5 to 6% below its yearly open, whereas 2022 and 2018 reached 10 to 11% below their yearly opens near the lows, so the room for further downside is narrower than it feels.
Market impact
The gold bull market support band sits near $3,800, roughly a 4% drop from current levels. Price briefly traded below that band in 2022 and in 2008, so a tag is not guaranteed, but the band has not been tested since 2023 and tends to attract buying when price approaches it. Silver is already at its own bull market support band and continues to bleed against gold, a setup that historically reverses once gold bottoms. A July to October window now marks the most likely timing for a base, with a successful hold opening the door to fresh highs into the pre-election year.
Frequently asked questions
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How far has gold fallen from its recent highs?
Gold has dropped roughly 30% from its highs and is trading near $4,000 per ounce, putting it about 5 to 6% below its yearly open for 2026.
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When did gold bottom in prior midterm years?
Gold bottomed in late September 2022 after a 22% drawdown and in mid-August 2018. The 2008 cycle saw a roughly 34% peak-to-trough drop, while 2006 produced a 26% decline.
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Where is the gold bull market support band?
The gold bull market support band currently sits near $3,800 per ounce, about a 4% drop from current levels. Price briefly traded below it in 2022 and 2008, but has not tested it since 2023.
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What is the expected timing window for a gold low in 2026?
The base case is that gold forms a low between July and October 2026, then re-accelerates into the pre-election year, mirroring the cadence of 2022 and 2018.
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Why is silver underperforming gold right now?
Silver has dropped to its own bull market support band and continues to bleed against gold, a pattern that historically reverses only after gold bottoms. Even after a confirmed bottom, silver may chop sideways for a year or two before resuming its uptrend.
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