In today’s episode, Craig Hemke and Chris Vermeulen discuss:
- Gold’s 2024 Rally: Analysis of gold’s impressive run throughout the year and its potential for further gains or a pullback.
- Gold Bull Flag Patterns: Discussion on gold’s chart patterns, including the bull flag, and how it indicates future price movement.
- Silver’s Potential Breakout: Exploration of silver’s lag behind gold and the possibility of a breakout.
- Fibonacci Extensions: Chris Vermeulen's use of Fibonacci levels to predict gold’s price movement, focusing on long-term and short-term cycles.
- Global Events Impacting Precious Metals: How geopolitical events, such as potential Middle East conflicts, could drive gold and silver prices higher.
Watch the full video below:
Hello again from SprottMoney, SprottMoney.com. We are now into the month of October, the home stretch. We've hit the quarter poll with one quarter of the year to go. It's hard to believe, but we have. So let's kick off October with your monthly precious metals projection video. I'm your host, Craig Hemke. And joining us is our usual guest, Chris Vermeulen of the TechnicalTraders.com. Chris, good to see you. Hey, Craig, always a pleasure.
be a fun month to look ahead. Of course, I think most of us here down south of the border are looking forward to getting this month behind us. We can get this election behind us, but for now we still got a lot long ways to go in the year. That's for sure. As we get started with this, I want to point out something exciting that Sprott Money has begun. Look at that. You can cash out some of your crypto gains. you, your Bitcoin, your Ethereum,
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8 % of a Bitcoin, maybe something like that, that you can swap out and get yourself $500 worth of gold or silver. So anyway, go to spropmoney.com. There's the site right there for more details. Chris, let's talk about gold and silver. It's just, you know, I was just talking to somebody earlier today and they said, gosh, can we get another rally in the fourth quarter? I'm like, I don't know. But if you'd have told me back in January that we'd have a
30 % year on our hands, you know, and we'd go from 2000 to 2600 or wherever we are, I'd be like, you know, that's fantastic. Yep. So we're in a bit of another one of these, you called a bull flag where, you know, you're making higher highs and higher lows and we're building toward another higher low, it seems. What do you see on the chart of gold?
Yeah, think gold has definitely run its course in terms of some pretty big moves. When we look at this chart, obviously we've seen it pull back a little bit. I think there's a shift in assets right now a little bit. We're seeing money flowing back into equities. It's coming out of the risk off plays like gold and utilities are pulling back a bit. But when we take a look at the monthly chart, since this is the monthly projection, we've been looking at this price action for a very long time.
This is going all the way back to early, early 2000 here using the Fibonacci extension. This is something I've been talking about for years as we had the rally up into the 2011 peak. had the pullback in 2015. And if we carry that forward, we are right up to this hundred percent measured move. And the way that I use Fibonacci extension is when price runs up to this 618 level. If you have a pause at that level,
then we almost always go up and hit this 100 % measured move. One stands for 100 % of this move is there's 61 % and then there's a full 100%. And so that's where we've at. We pretty much tagged that. And I've been saying when gold gets to this particular level, this is like, you know, a 15 year chart pattern, a super cycle pattern. Maybe gold doesn't have a whole lot of upside for a little bit. I do think we're going to get into a bit of a pullback in the markets.
I think silver has maybe a little bit more upside. If we have like bombs getting dropped in the Middle East or something like that, we might see gold and oil and precious metals shoot higher as kind of a black swan event. But overall, the momentum has hit that phase. And as you and I talked about last month, this big rally in gold, the whole world kind of moving into it because they're worried about falling, other assets falling in value, whether it's equities or currencies, things like that.
It's very similar to what we saw in 2007, just before we went into a financial crisis where gold pulled back. So pullback from here is actually very healthy for gold. After that, we start into a, excuse me, a new multi-year run in gold where we'd be looking way up in the $3,000, $4,000, $5,000 range. So the big question is like, how much does it pull back? And do we have the like, you know,
a third World War III kind of break out here or is it still just going to continue to be, you know, talks and all that stuff. So there's kind of a lot going on. And I think most of the upside is done temporarily for the precious metal space. You know, it's for people watching. You should be watching this every month, but if you've missed a few months, just go through the SprottMoney.com archives. Chris has been projecting that 2,700 level since what? Like April.
Cause you can do it right there. They're on the weekly chart. It's the same thing, right? So there's 26 50 exactly. this is still the monthly chart, but you know, both patterns from the low up to this recent high and a few years ago back down, it came right up here. had three months where it flirted around that six, one eight, and now we've hit the a hundred percent measured move. So this is going like a 15 year timeframe and also like
you know, a 10 year timeframe and both of them are at this point. So to me, this is like a huge inflection point. The only reason I think gold continues to go higher is if we have like something crazy in the middle East or, you know, war crack out in a much more deadly way. I think that would spike it up, but overall, I mean, this is to me, you know, a warning sign that I think the economy, the stock market is very close because when gold tops out,
That's typically when we're going to see the rest of the market and the economy slowly start to top out right after it. Yeah. We could chop here for the next three months, this whole final quarter and pull back to 2,500 and it would clean out some of the speculative money that's on the COMEX and we'd still be up 25 % year to date. Yeah. You so you're right. mean, this again, you string six or seven or eight green monthly candles together. There's probably, it's not going to 18 of those in a row.
So a pullback here wouldn't, like you said, in a long-term picture, it wouldn't be surprising. Now, as you also said, anything can happen if by a week from now there could be full-out war in the Middle East and we could be talking about Fed emergency rate cuts. So you got to keep all that in mind too. Chris, what I'd be interested to see is if we took a chart like that and did it with silver, because that's what's
mean, silver, at least you can look back and go, well, okay, there was resistance back here and support back there a dozen years ago. Where would these Fibonacci numbers play out for silver? Yes. Silver has got a pretty ugly char. We could try drawing the same levels. It obviously had this massive huge rally up and it came all the way back down. If we carry that, which it's hard to say, like, do we use the COVID spike low? I would probably go with this level around here. I'd go that one. Yeah. It's kind of more of the legit kind of level.
It shows silver has obviously a ton of upside. I don't think it's going to happen right away. But if you look at this upside from where we are, I think this upward target, that's 93 % in value. I think that'll probably happen after we have some market correction. So I am thinking silver might still squeeze up into this 34, maybe 36 range, which are right into these highs here.
So it has a little bit more potential for a kind of a last minute, you know, in the next month or two, maybe a pop and squeeze up. But I do feel like it'll probably pull back. And then once that pullback is done, then I think it's an easy $60 an ounce, probably a whole lot higher. And it could run for years and years along with gold. And this will be the exciting time when you and I are talking, you know, several months from now, and probably the financial systems had some type of reset, some type of black swan has happened, or defaults or whatever.
You know, when we get into this phase, this is going to be real exciting because this is when the miners should start to really come to life and support things like silver is not backing up what gold is doing. Gold miners, if we look at GDX, is not backing up what gold is doing. mean, silver and miners are floundering. They should be screaming to new all time highs, but they're not. And that's a huge warning sign that this just a one commodity rally like gold is the global defensive play for people.
And so that's where people are going. They're not piling in for huge speculative gains right now. People are going there to preserve capital because they're scared. They're not looking to swing for the fences. But when silver and miners start to outperform, probably sometimes late next year, hopefully, that will be like our early sign saying, okay, we're starting to see speculative money move in. The markets have had a reset. Things are revalued. So there'll be a really exciting time when that happens. But I still think there's
quite a bit of damage and a lot of chaos to happen between then and now. Can we do this again? Because I think this is really fascinating and I want to make sure people caught it. Back on that gold chart, because I remember we talked about this back when gold shot higher in March and into April, that first 61 % move and you said it's going to go up there and it's going to mess around and stop at that 61.8. And then you said,
once again, it did. And then you said once it got through there, you almost always for sure going to do 100%. And now here we are. And I think that's fascinating. So that with that said, now go back, if you don't mind to the silver chart that you just showed and do that measured move again. And it was what the next target was really more like 42 or four, something like that, almost exactly those peaks.
Yeah. From back in, from back in 2012. And I mean, just, again, silver has been lagging gold well, and it will continue to lag gold until it catches up. Why wouldn't it play out the same pattern, Chris? It totally could. mean, I think it's kind of way behind for silver to play out the same pattern. needs to rally all up to here. That's where gold is equivalent to trading right now. It's hitting a hundred percent measured move. So.
We're a long ways from there. first. You know, this pattern. It would go up and stall first at the 61 % like gold did back in April. Yeah, it could go up here, chop around and pull back, take a pause and then take a run up. But this overall pattern, like we've had a nice run up, it's consolidating. It does have potential that we could get some screaming move in silver and it maybe wants to run up to 41, 42. I mean, obviously we don't know. The chart pattern is actually still bullish. It's very bullish for gold.
If we look at gold and silver, they are in strong uptrends. They have bull flag patterns. The only reason I'm bearish is simply on gold specifically is because there's multiple timeframes. There was even, think, a shorter timeframe. We did like the 15 year, we did like the five year. I think you can go to a shorter one and they all come to the same price level. So to me, gold is just saying it's run out of steam, but silver has a funny way how it moves. Sometimes it'll move way after gold has and people move into it to try and catch that move.
You know, there is potential. This is a nice bull flag. Silver has that chart pattern where it could pop and rally very quickly here and tag that 618. And from there it could pull back. then, you know, when the new bull market starts, you know, it could go up to this 59, 60 level. So things could totally still play out for silver, but silver is definitely a much more wild beast. And it's more of a speculative emotional swinging just simply because it moves percentage wise a lot. makes everybody very emotional.
when something swings 15, 20 % fairly quickly. Yeah, for sure. Chris, I know from our discussions past that what you do for your subscribers at the technicaltraders.com every day is keep track of what you call best asset now. We are into what is typically, know, seasonally a difficult time for the stock market. I'm just curious. I mean, what's on your board as the best asset now here in the second week of October?
Yeah, it's interesting. mean, if we look at the seasonality chart, usually November, if we look down here, on average, November is super volatile. We usually see waves of buying and selling. And then we go into the holiday or the Santa Claus, the Christmas rally, whatever you want to call it, come near the end of October. So I'm expecting still volatility in the overall equities market. But if we take a look at the best asset now, it's amazing. Lithium has just skyrocketed. Really? It has.
Absolutely just taken off percentage wise and has gone absolutely ballistic in the last month. mean, up 41%, huge volume moving in. it's definitely percentage wise, it's taken the lead. But if we zoom way out on the chart, it really is a reaction high, meaning it's like an oversold potential bounce mixed in with a short covering rally.
You know, this, so I wouldn't get too excited. There's probably obviously news in that space, probably sparking some of this, I would think. But this type of move, this 41 % move, I mean, we've seen moves, maybe not percentage-wise as big, very visually, we've had multiple of these. So that is kind of one that has a lot of attention. I'm not a fan of jumping into anything that has got massive gaps, huge volatility, like that so much, but.
I mean, we are seeing really weird sectors top performing. The other is, is uranium stocks. They've had a really strong ask it percentage bounce. They've moved up, but again, in the grand scheme of things, they're pretty volatile. And you could say they broke down, they put in a double bottom, but now they're up into the middle of all of this noise, which is kind of a resistance area. So to me, this is like running out of steam. It'll take a lot, I think for uranium stocks to break even higher.
We can look at the ARK QETF is performing very well. It's kind of trading up near these highs. do a lot of the ARK ETFs are very, very similar in their chart patterns, which is they've all kind of gone into a topping phase stage four decline. And now they're in this like kind of giant potential base or launch pad for them to want to rally. But
I mean, the overall equities market, I don't know how much more upside there is. To me, it looks like there's about four to 5 % upside in the SP 500. I think we could still see about an 8 % rally in the NASDAQ, which could squeeze a lot of these sectors higher. But I feel like that's it. Based on short-term analysis, I think there's not a whole lot of upside left in the equities market. And it's probably going to see some rally into the elections. It's going to be interesting to see how price action moves.
investors react as we move into the election time and all that stuff. I'm sure we're going to see a pivot, some type of big change in trends once the election takes place and the dust settles. it's really tough because to me, individual sectors are very difficult. I would say gold is still one of the strongest chart patterns. Silver, I still like. Simply because this is a favorable time within multiple different cycles in the economy that they come to life and hold their value like a
If we take a look here, Craig, at if we look at gold, this is the daily chart. If we look at gold, mean, gold has really just had a very, very small sideways pause just in the last two days. It's pulled back a little bit, but considering if we look at the U S dollar index, it has just screamed higher and gold hasn't really budged. Gold is just holding its value saying, no, no, no, I am the safest place right now. And nobody's trusting currencies, what's going on and all that stuff. So
Gold is still super strong. And if the dollar eventually has this bounce, this kind of downtrend bounce, if it stalls out and starts to go down, we're probably gonna see gold and silver have that one more push. I think gold could hit 2750 is kind of my ultimate upside target. Silver, I think it hit 34, 35, potentially could pop and go higher. So I still like the precious metal space. And I like the indexes themselves. I mean, we're long the SPY, we're long the QQQ.
And of course we're hitting new all time highs in the SP 500. The chart pattern for the SP 500 is still very bullish using Fibonacci extensions, we can predict or forecast where price should go. And if you take a look at this, it's pretty clear we had the rally up, we had the pullback, we have paused at the 618 and now we're starting to run up for that next part of that move for the SP 500. NASDAQ very similar.
except for it's not hitting all time highs quite yet. But I mean, this market is bullish. This points to from where we are right now, you know, about a 3 % move. And I think we could squeeze a little higher up to 6,000 for the SP 500. 6,000 is a whole number. So people are naturally going to say, hey, if it hits 6,000, I'm selling a chunk of my portfolio. When you're stuck under a whole number like that, a solid round number, people for some reason just put their stops there. They're like, I'll trim some profits at 6,000.
So our a hundred percent measured move is very close there. Plus there's major mental resistance above at just 6,000, cause that's just a number people will like to sell stuff at. Yeah. And like you said, it is a crazy time as we approach this U S election, all the geopolitics that are factoring in as well. It's going to be an interesting month, my friend. I looked forward to visiting with you next month because by the time we visit, maybe this whole election thing will be over with. I don't know.
but gosh, it's certainly going to experience a lot of volatility in both directions. And that's where, the guidance that you can provide is certainly so helpful. Thank you so much. You shared so much just in the last 20 minutes. And I know everybody watching has found it very valuable. So thanks for everything, Chris. Yeah, no problem. And again, thank Sprott Money on your way out. Visit them for all your sound money needs, your purchasing, your storage of gold and silver. Thank them that way.
But again, just thank them with a like or a subscribe too on whatever channel you're watching this, because that helps them cast a wider net and that benefits everybody. So thanks to Sprott Money for all that they do. And thank you, Chris. And please keep an eye on this channel because we're in a new month. There's going to be a whole lot more information as we go through this month. And we'll be back again soon with more updates from Sprott Money. For now though, it's time to go. Thank you, Chris. Everybody have a great rest of your day. Take care.
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