Gold Ready to Skyrocket Any Day Now

Craig Hemke (00:01) Happy August, happy late summer from everybody at SprottMoney and SprottMoney.com. It's a new month and it's time to get it started with your precious metals projection, that monthly video we do early in the month, every month here at SprottMoney. I'm your host, Craig Hemke and joining me as usual is my good friend, Chris Vermeulen of the TechnicalTraders.com. Chris, always good to see you.

Chris Vermeulen (00:32)
Always pleasure. Yeah, good to be here, Craig.

Craig Hemke (00:34)
I is August. We just wrapped up a real busy July. There's all sorts of stuff on SprottMoney.com that you might have missed besides maybe the summer sale, which is now over, but there's still great deals while they last. SprottMoney.com. Go to that site. They got all kinds of silver. They will ship it to you and insure it. If you buy at least $500 worth and these days, it's not hard to buy $500 worth.

Anyways, SproutMoney.com should always be one of your first choices whenever you're in the market to add to your stack. All right. And then you should also go there for more information like these videos I do with Chris, the other videos we do during the month. And I'm just going to plug what I've been writing lately under the Insights tab. You'll find all sorts of interesting information. And I try to keep it timely early in the week, every week, Monday, we'll post something. Recently wrote about

how you can follow along the open interest for trading clues. We talked about what the Trump is telling you about where the Fed is headed as soon as May and what those implications are. And even this week, planning ahead for a late summer rally. ⁓ thing Chris has shown me before in the past is the long-term seasonality of the gold price. And I'm sure that'll come up again as we're talking today. But August into September and even August

early October, I guess, usually a very good time ⁓ in the gold market. Maybe slows again into October, November, then picks up again in December and January. You're to be long. The seasonality of COMEX Gold ⁓ this time of the year is pretty good. So anyway, all that as an intro, again, just keep that SprottMoney.com site, save your bookmarks and go there often. ⁓

Chris Vermeulen (02:25)
you

Craig Hemke (02:31)
Chris, is early August. We've had some real shakeups that are moving prices around. I always tell people on my side, it's not the scheduled news that you got to look out for, you know, all the data points because, know, we can kind of brace for those. It's unscheduled news. You know, we never know what Trump's going to tweet. ⁓ Hey, let's start where we often do. ⁓ You know, your big thing is best asset now. And so you're constantly looking across all sectors trying to figure out where things are hot.

Chris Vermeulen (02:46)
Yeah, yeah, no kidding.

Craig Hemke (03:01)
things are moving where you want to be positioned in early August. What's the best asset now?

Chris Vermeulen (03:06)
Yeah, well, we're at a really critical turning point. The market is teetering and trying to figure out if it is about to start a bigger correction and sell off or if it's going to muscle its way up and have a push in a run higher. The markets are pretty weak right now. Believe it or not, even though the S &P 500 NASDAQ are near all time highs, if we take a look at my strategy here, this color coded chart of the daily chart of S &P 500, we actually have a trend change. We actually closed out our long positions in stocks this week.

And the market, even though it's near all time highs, is actually showing a lot of weakness that it wants to sell off. We had the same type of signal right over here earlier this year before we had the tariff crash. And so the market's trying to figure out what it's doing. And right now, the Magnificent Seven are muscling their way higher and they're dragging these indices up, even though almost everything else under the hood is actually very weak for the stock market. And that's why we have this trend reversal. This is what I call a camouflage move. The market's moving higher, even though it's not very strong.

and the odds at this point still are pointing to lower pricing, but we could kick over, you know, in a session or two, this could kick back into an uptrend and might get momentum and start another big leg. So that's where we're at, where we're at as a nimble trader, we have to like sometimes step out, let things recalibrate a bit. And if we have to step back in, we'll get back in and we'll ride it higher. A good, interesting chart here that I wanna bring up is this chart of...

what the NASDAQ did, the NASDAQ 100 did last year and this year. The top chart is right now, the S &P file, or sorry, the NASDAQ, the QQQ. This is the September, or sorry, the April lows. And the bottom chart is 2024. This is last year. We had a low in September, sorry, April. I don't know why I'm dyslexic today. And then we had this very similar type of sharp breakdown and the technicals changed and we had a cell signal as well.

Craig Hemke(04:38)
Hmm. Goodness. That's crazy.

Chris Vermeulen (05:01)
It is like, it's like mirroring itself. And so last year we saw 15 % correction. It came back down into those April lows. ⁓ You know, so it is potentially if, you know, sometimes the market rhymes and repeats itself. We could see a 15 to 25 % correction if the Magnificent Seven don't keep dragging things up because the April lows are actually a lot lower than 15 % correction. Like last year, it's going to be like a 20 plus percent correction. So.

That's the scenario we're at. Like we're on the cusp of another buy signal to go long and ride the magnificent trend or we are about to watch a precipitous waterfall and watch a lot of people really suffer through here. And all of that actually, Craig, if we take it one notch further, you and I talked about this last time. If we compare it to 2007 stock market and gold top, check this out. So this is what's really, really interesting.

The left chart here is the S &P 500 from 2007. The S &P 500 put in a high and then it put in a nominal new high. went up just a bit higher. Gold had been screaming up to all time highs and that's the yellow line. Where we are right now with the S &P 500, this is today's price action. The stock market put in a high. We had the big sell off just like we saw over here in 2007 and then it rebounded to a new high.

Gold is leading the way, it's the number one asset class again, just like in 2007. And so we're in this whole scenario, are we gonna have this type of repeat? The market right now is trying to suck traders and investors in. just like you mentioned your article, I just wrote one the other day as well on FOMO and how so many people feel like they're missing out on this rally and how many people are moving in right now. It's crazy, I have what I call the inbox indicator, the amount of emails and social media stuff that we get.

we get a really good feel of what market participants are feeling and what they're doing with their money. And it's very similar to, you know, we're in this scenario where people are giving up on, on thinking the market's going to go down. They're moving into the stock market right now, and they're moving into the magnificent seven because they've just had enough. They're like, I'm in, get me in. And so this could be that last hurrah. And what's interesting is you and I'll go to the gold chart here in a minute. Gold right now is showing about a 20 % upside rally.

Well, back in 2007, it also had about a 20 % rally projection. And as the stock market started to sell off 20%, gold shot higher 37%. And so we have a very similar setup right now where gold has about a 20 % upside and it could blast right past it. It could be a very explosive move as the stock market eventually rolls over here. So that's the big scenario. It really doesn't matter what it does because we follow price.

trade our ideas or projections, but that's what I think is on the cusp of happening. so we're at this tipping point of like gold about to break out and run and, you know, the stock market about to roll over, which I've been expecting for a long time, but these patterns just keep dragging out. So that's kind of it in a nutshell from the stock market and kind of gold perspective, but we can dive into individual charts here as well.

Craig Hemke (08:19)
And I just was mentioning, you got to keep an eye on Sprott Money and you got to sign up for the newsletter and subscribe on the platform that you watch and stuff because it was just a couple of weeks ago I spoke with Michael Oliver and I know a lot of folks here are familiar with his work and he's kind of saying the same thing. So if you missed it, go through the Sprott Money archives from July and find that interview with Michael Oliver. He's a little worried about the stock market rolling over too. One other thing, Chris, that you'll like, I saw it.

thing this week on Twitter X that said, from the lows of 2020, the S &P is up, you know, whatever 300 % or whatever the number is, something outrageous. But if you take out just the top 10 stocks, that mag seven plus like three more, it's up 20%, 30%. The other 490. So the thing is definitely being dragged along by the kind of top heavy, you know, weighted part of the index. So.

Anyway, just a word of warning. And again, we talked about the seasonality of gold. It's not necessarily the best seasonal time for stocks either, is it?

Chris Vermeulen (09:28)
⁓ No, I don't think I have the seasonality chart up right now, but let me just let me pull up this the physical. This is an interesting chart on on gold, so let's just pull up. ⁓

If look at the Sprott physical gold fund, and it's the same with other physical gold funds. So gold has had this beautiful chart pattern where it rallies, it pauses, it rallies, a series of bull flags. We're in this massive, I think, final bull flag where we're going to see gold go to about 4,100, if not blow through that and go a whole lot higher. When we look at the futures chart of gold, and I noticed you had this chart on your article just a second ago, which is the...

regular trading hours ETF, but if we look at gold, gold hit on the futures chart, new all-time highs today. It still has a bunch of, know, it's got some of these other highs. It's hitting all-time highs. But when you look at gold from a regular trading trading hour standpoint, when we look at where gold trades between nine 30 in the morning and four o'clock, we're not trading at all time highs yet. And so I like gold. I'm getting ready to get long gold for a trade.

And I'm actually waiting for a breakout. actually wanna wait for this to break and close above there. And that will be my signal that, okay, it is officially broken out and we're gonna see a big move up. you had this, I think this chart on your article just showing like during regular trading hours, we keep bumping our head on this like, you know, is a double top, a triple top, quadruple top. Like, you know, how many times is it gonna hit this before it like breaks through this level?

Craig Hemke (10:58)
You're a fool. Quintuple!

Chris Vermeulen (11:07)
We're getting very close, I think, to a breakout and then we're gonna see a huge run, which will drag miners up, it'll drag silver up. We're definitely gonna see a big push and a run to the precious metal space.

Craig Hemke (11:19)
Yeah. And you know, what's interesting, we've been, another thing we've been talking about on my site is, you know, we had last week, gold was going down, you know, and everything kind of changed with the job report here in the U S and everything reversed and went higher. Great earnings came out as we, you know, let's begin to focus on the shares, Newmont and Agnico and all that. And they sold off some.

Chris Vermeulen (11:30)
Hmm.

Craig Hemke (11:40)
because it seemed as if the market and the generalists are like, okay, that's it for the news. Let's see if gold can hang in there for another quarter. And as soon as it became clear that yeah, gold was probably going to hang in there for another quarter. Man, the floodgates open. Let's start with the GDX. I'd love to hear your thoughts. We're 58 now. If you go all the way back on a monthly chart, there's a clear head and shoulder top that

Chris Vermeulen (11:41)
Yeah.

Craig Hemke (12:09)
doomed us for years from back there in the day. There it is. You got the two shoulders at 55 and the head up there at 65. so GDX seems been banging against that shoulder line until this week. All right. That's enough of me. You're the guy here. What do you see there in the GDX?

Chris Vermeulen (12:26)
Hi, you're just

as much as a technician as I am. But yeah, you're right. I mean, it is it's piercing through this level. You know, we're playing some serious catch up. We're seeing a run up, you know, miners. I'm going to drop back to the daily chart because if we zoom in on the on the shorter term price action, what I what I find really interesting are gold miners have broken out. So silver miners and when we're in a ideal precious metals market, which we are now, I believe for the next month or two.

potentially a little longer, miners usually lead the way. And so they usually give you an early warning. I remember back in late 2008, early 2009, gold miners will pop and take off and run and make big moves. And then a few days later, gold starts its move. And so the savvy money, the aggressive money, the people who are front running, who know we're in a precious metals environment, they say, get me into the more leverage play so that, you know, because I believe gold's gonna move. So I want to own gold miners.

And so that's what we've seen here. We've seen it already break out. People are moving into the miners. And when we look at an overall target, I think it's kind of interesting. We had this very significant low with high volume, a high volume rally. And then we had this first pullback. And, you know, if we look at GDX right now, and this is the same with the GDXJ and silver miners, they've pretty much hit their hundred percent measured move based on this pattern.

Generally when you get a rally and a pullback, when you hit the 618 level, you usually are gonna go up and hit that 100 % level and we've done that. So I believe this is like, if you're not in miners, I believe we're gonna see maybe a pause or pullback here, which can be an opportunity for the next leg up. But it's also our early warning sign saying, okay, miners are now leading the way, which is good. Gold should follow and break out any day. I mean, I used to watch it and used to really just trade gold and miners back in the day. ⁓

Craig Hemke (13:57)
Mm-mm.

Chris Vermeulen (14:19)
usually there's like a four to seven day delay or miners break out in this particular situation and then gold moves. So it's kind of that early warning, like miners actually tell us and get us ready for a move in physical gold, which you can trade with leverage ETFs or just buy physical for the next move up. You can do whatever you want. you know, miners right now, I believe they've had that first impulse move. I think they might pause a bit. And now the focus is on gold for its first move and breakout.

and silver will probably follow suit ⁓ maybe a little bit after gold. Silver's got a bit of a noisier chart to build out and break out first.

Craig Hemke (14:58)
Chris, let's have some fun. You mentioned gold, the next leg up. We talked earlier, 20, 30%, that kind of thing. Silver, see how it goes. But if we're talking that level of gold price, well, the mining shares are probably going to play along. So let's have some fun. That GDX level at 58, this is the first time it's been up there at that level in like 13 years. So one could make the case it's got some catching up to do, perhaps. I don't know.

Chris Vermeulen (15:03)
Mm-hmm. Okay. Yeah.

Craig Hemke (15:28)
I love those Fibonacci measured moves that you like to do. Let's do one on the monthly chart of the GDX, would you? This for fun.

Chris Vermeulen (15:35)
Mm-hmm.

Okay, let's try it. Let's check it out.

Yeah, why not? All right. So the big question is where do we pull the levels from? And that's one of the difficult things with miners and even silver is they have very noisy charts. we have to like fish around and this is where it comes into like it's experience and then it's also art. You kind of have to figure out what looks and feels right.

Craig Hemke (15:48)
Yeah? For sure. Yeah.

Chris Vermeulen (16:04)
So, I mean, we could go off a couple of things. We could go off this spike low that we had in COVID. We could have this run up as the first move and it came all the way back down here and then we carry that forward. So it says more or less we've hit that 100 % measured move. So that's kind of, that's a pretty big chart pattern that's been drawn. Now we could pick another one. ⁓ I usually like to start with the start of ⁓ a leg. I would say this one here to this high.

Craig Hemke (16:09)
Yeah. Mm-hmm.

Chris Vermeulen (16:34)
and this pullback, it also carries forward, which also happens to be the same one, which is why we probably traded sideways here for four months. It's two resistance levels, two different patterns running out of momentum. Not only that, as you just mentioned, Craig, it's the tops of these shoulders from a decade plus ago. So there's overhead resistance of people who suffered all of this, and then they finally get back to break even they're like, just get me out. Yeah. 

Chris Vermeulen (17:02)
That's a lot of people getting out or, you know, just overhead resistance. ⁓ Let's, you know, I think we almost need the weekly chart to actually find something because there's a lot of wicks in here. Let's drop to the weekly chart and see if we can get a another pattern. I'll just clean this up a bit. ⁓ The weekly chart. Where could we go from here? I would say this is a significant standout low. I would say this is a standout high. And then I would say this is a low here. We could carry that forward.

Craig Hemke (17:09)
All right.

Chris Vermeulen (17:32)
And for GDX that puts it up to 64. And I don't know where that falls in the past, but let's draw a line on it and drop back to the monthly chart.

Craig Hemke (17:36)
Which is that old head. Yeah, that's the head from 2011. All right, do the big daddy. Go from that high in 2011 to the low in late 2015. And where does that project out? From that high in 2011 down to the low in 2015. And if you carry that forward, what are the numbers?

Chris Vermeulen (17:46)
There we go. So.

Sorry, is that it again, from where to where? you're talking more or less taking the height of this. OK, yeah, OK, so if we stack that on top.

Craig Hemke (18:13)
Yeah.

Chris Vermeulen (18:21)
That is a pretty juicy move. I remember a long time ago, my projection like this is something like 125, 140 bucks for silver. So yeah, if we were to break this, goes ballistic. We might actually see that, know, well, this isn't silver. I was gonna say if this is silver, we might get that giant short squeeze, but.

Craig Hemke (18:37)
Yeah. Well, again, I mean, you're in space. It's the things never been. Those would be new all time highs. You know, when you see this and some of the individual shares that have been making new all time highs and they just keep, you know, it's almost like there's nothing to stop. right. In our remaining time though, the silver miners, which for crying out loud, I mean, have been the, ⁓ the beating, you know, dog of the, the sector. 

Craig Hemke (19:07)
Is that the CIL or is that the S-I-L-J? What you got there?

Chris Vermeulen (19:10)
Yeah, this is a sill, yeah, with the J. It's, it's a it's a it's been a painful ride. It, ⁓ you know, has so much hope. And then you just crushes your dreams. It gets you all riled up, crushes your dreams. So obviously, it's tapping on the door to break out. And, you know, there's never been a better time for precious metals. feels like every year. It's a better case for precious metals and miners to rally and they

Craig Hemke (19:14)
What do you think? Yeah! Right.

Chris Vermeulen (19:38)
You know, I think we're actually at that scenario where things are about to really break out and go ballistic. yeah, obviously we could see this have a very big move. It's it's stuck at resistance. ⁓ and we'll just have to see how that unfolds. I don't know where we would draw anything on there to get the upside projection. mean, just based on this, this low and this high and this low, ⁓ it's really going to run right into, you know, this a hundred percent measured move isn't a whole lot higher. So

Chris Vermeulen (20:07)
And that's why I like gold, believe it or not, because maybe miners have already played their catch up move, technically, maybe they have. And then when we go and we look at the chart of gold itself, gold has got this massive high momentum pattern that points to $4,100, potentially a whole lot higher. I have to stretch this out, but... And obviously drop down to a weekly just for a better view, but to me...

I think gold has got this really nice chart pattern. As much as people want to be in miners, gold is pointing to like this 40, 4,100 bull flag pattern that everything else has already popped and moved and a lot of investors have moved into those. Now I think everybody's going to be ready to move into the physical and drive it higher. And I also think we're very close to potentially a big market sell off. I think the markets are.

Craig Hemke (20:39)
Mm-hmm.

Chris Vermeulen (21:01)
getting dragged up by the Magnificent Seven and we're close to, think, probably some bad news, which is probably why gold is holding up. I like gold. really like, like, miners have some explosive potential, but right now, if you had to pick one, which one is to move next? I feel like it's actually gonna be gold. And there's 20 % upside and I like gold because it's stable. It's not quite as volatile and can't give the gains back as quickly, but I mean, the whole space is locked and loaded. It's already moving.

Craig Hemke (21:17)
Yeah, sure looks like it.

Chris Vermeulen (21:29)
and gold is on the verge of the next major leg up.

Craig Hemke (21:32)
Yep. And you know, for that macro, more fundamental background, like I said, I urge everybody to check the insights tab at SproutMoney.com because ⁓ Trump is telling you whether he comes up with a rationale for firing Powell or not, by May of next year, he's going to put in somebody that's as dovish as can be. Besson's talking about merging the operations of Fed and Treasury. I mean, all this stuff is extraordinarily bullish in my view. And so you

You know, so when you hear Chris's numbers, you think, ⁓ how can that get there? Let me tell you how I can get there. So anyway, Chris, thank you so much. It's always fascinating. I look forward just to speaking with you every month and I look forward to doing it again next month. In the meantime, where can people find your work?

Chris Vermeulen (22:08)
It's funny.

Yeah, well, mean, just to quickly show one more thing, Craig, we've got the seasonality chart. Like, it's funny, the people that I follow, some of the people I follow that are technicians, for some reason, some of them have gone very bearish on gold. And to me, I'm actually the most bullish I've been on gold in a long time. We're in the perfect like Goldilocks mission, like Goldilocks zone of the stock market, the economy and all this stuff. And as you mentioned, the seasonality chart of gold, here we are in August, literally.

Craig Hemke (22:21)
sure. Yeah, do it.

Chris Vermeulen (22:46)
Right near the low, we're probably this is probably like to the day, like gold should rally for the next two and a half months or one, two months to the upside. The chart patterns pointing to it. Historical 2007 market top shows two months of selling in stocks, two months rallying gold. So, ⁓ yeah, it's exciting. We're on the cusp of some very big, you know, some pretty life changing moves in stocks and commodities. So.

Yeah, again, and if people wanna follow me and get more of this, you can go to my YouTube channel, The Technical Traders. I share that every day. You can go to my website, thetechnicaltraders.com, which my whole mission is to try and protect people from market crashes and to make sure you're holding the assets that are going up. And I really just trade my own money and people just copy the same ETF trades I do. There's five to 12 portfolio adjustments a year. It's pretty straightforward. And ⁓ yeah, it's all about managing.

properly managing our money and following price, not following news or or economic data and stuff like that, that will generally put you on the wrong side of the market or keep you scared out of the market when you actually need to be long. that's, ⁓ yeah.

Craig Hemke (23:57)
And I know Eric Sprott has told me on multiple occasions. He very much respects everything you do. So there's a little outside endorsement for everybody watching this channel. Chris, great stuff. Thank you as always. And from all of us, SprottMoney, SprottMoney.com. Keep an eye on this channel. I mean, we're still early in the month. We've got Ask the Expert. We've got the monthly wrap up. Some guests I've already lined up that you're going to want to hear from. So keep an on the channel so that you don't miss any of it.

Chris Vermeulen (24:07)
Great. Thank you.

Craig Hemke (24:24)
And hang in there. It certainly looks like we got a couple interesting weeks ahead. But for now, we'll sign off. Thanks to Chris. Thanks everybody for watching and we will have more content for you from Sprott Money later on this month.