The precious metals complex has had a frustrating series of trades throughout most of August. Gold is down 1.2% for the month, whereas silver is off by 4%. That’s a sharp reversal for the dominant, bullish trend in 2016. Aside from a correction in May, gold and silver have largely been off to the races. Their rallies have also revived an essentially moribund mining industry. So is the latest softness in precious metal prices a consolidation pattern, or a possible source of consternation?

If recent history is our guide, there doesn’t seem to be much to worry about. Gold and silver bullion are riding strong momentum. Undoubtedly, the upside target for the bulls is the previous record highs achieved during 2011’s magic run. With global economic conditions a top concern among developed nations, the safe-haven status of precious metals should keep buyers buying and short-sellers watching their backs.

Commonly accepted technical analysis methodologies also point towards a future upside swing. For gold, the consolidation pattern that evolved in early July is horizontal. More often than not, these are bulls and bears settling into a “resting” phase before resuming the dominant trend.

Silver provides a more obvious sign that the precious metals complex is indeed simply consolidating. We saw a huge run-up that began in the beginning of June. Silver eventually got gassed when July rolled around — not surprising when an asset gains 26% in just over a month’s time. It too entered a horizontal trend channel. This appears to be a setup for a classic flag formation, which usually resolves in the direction of the dominant trend — in this case, up.

Gold and Silver Consolidation or Consternation - Chart

Admittedly, the sideways price action has lasted for quite a while. Normally, we’d like to see a consolidation pattern be a fraction of the length of the immediately preceding rally. It’s not a rally-killer, by any means, but it does give us some pause.

For further analysis, we can look at the price action for the other precious metals — palladium and platinum. Palladium has had a very stout July, but things immediately softened up this month. Aside from a quick burst in buy orders that was quickly negated the following session, it’s been a downhill ride for one of the rarest metals on Earth.

Then there’s platinum. Often, platinum and gold are stacked against each other because the former is substantially rarer than the latter. If one rises, it should be a tailwind for the other. But in this case, it’s hard to read the signals. Platinum is easily the worst looking chart, with last Friday’s gap-down session threatening to erode its bullish trend channel. Platinum could recover, but commodity investors would definitely like to see an immediate wave of buy orders to bolster some confidence.

As an aggregate analysis, I believe it’s too early for panic. Platinum aside, the precious metals have an overall positive technical trajectory. But we should also accept the possibility that things may get dicey in this sector.