Gold and Silver Face a Dangerous Turning Point

Craig Hemke (00:02.328)
Well, hi everyone. We've now reached the month of August. It is August the 4th, 2026. And like we always do, we're gonna kick the month off with your precious metals projections. I am your host, Craig Hemke, and joining us as we always do to start the month is Chris Vermulen of the Technicaltraders.com. Chris, it's always good to see you.

Chris Vermeulen (00:24.176)
Yeah, thanks for having me, Craig. Always a pleasure.

Craig Hemke (00:27.554)
Got a lot to talk about this month. Before we get going, of course, we've got to point out to everybody this content is sponsored and brought to you by the good folks at Sprott Money. You can go to sprottmoney.com and always find great deals, physical precious metal, storing that precious metal. They'll ship it to you if you'd like. all kinds of great metal on sale right now, great deals on gold as well. So keep Sprott Money in mind.

If you're looking to find a bottom and take advantage of prices that are down quite a bit in the last couple months, sprottmoney.com. Of course, give them a call at 888-861-0775. Chris, we'll just dive right in. We, you know, what's interesting, I'm thinking back to early July and our precious metals projection call. And we were looking at you know, gold kind of coming down and silver coming down and

S P was kind of everything was trading kind of sideways. And then we go through July and they've kind of traded sideways. Not much has changed. So I'm excited to pick your brain. I want to start though with something that's kind of in the news here, late July and early August, and that's the dollar and the dollar index. You know, it's most folks know it's made up, it's a weighted index, mostly weighted toward the euro, but the yen is in there and the pound and a couple of other

Chris Vermeulen (01:27.278)
Yeah. No.

Craig Hemke (01:48.354)
fiat currency. So it's really weighing the dollar versus all this other fiat. Well part of that index is the yen. And I think most folks have been following the headlines in this new program between the US Department of Treasury and the Bank of Japan to support the yen. So that has had an impact on the dollar index. The dollar index has been having a it's called a negative impact on the precious metals for several months now. So let's start with that dollar index chart, throwing all that fundamental stuff and everything else going on in the world out.

What do you see in the chart of the dollar index that can give us a clue as to where it's headed from here?

Chris Vermeulen (02:23.876)
Yeah, I mean, that's that's the that's the big thing, right? If you if you can just ignore the fundamentals and the fiat currencies usually will fail over time and everything that's going on to potentially cause the dollar to fail long term. You know, if you step back and look at the the long-term picture of the dollar, it has come down, it's put in a you know a multi-year kind of basing formation. It's now starting to make higher highs, higher lows. We have the long-term 150-day moving average, which is this green line, which

Typically, if it is sloping up and all the moving averages are above it and prices above it, we're typically in a bull market. And so we have seen this happen for a long time. We've seen the dollar put in a bottom, really put in a bottom in January of this year. We saw precious metals put in a peak. And now we're seeing the dollar enter a bull market. And I think that's gonna have a lot of put a lot of stress or hold, I think, precious metals down to some regard. Now, obviously, we've had a very sharp pullback recently.

with the Fed and in the yen and and all that causing a very sharp pullback. But I don't I don't look too much into headline news driven moves. It can over create an overreaction. We had a huge volume spike. So you know it was definitely a very emotional move and a lot of unwinding. And so now the dollar is trying to find support somewhere down in this, you know, this 99 range. you can see it's had all these highs previously, it's broken through those and now it's pulling back and it's kind of testing this this critical support level.

And I think it's just a matter of time probably before we start to see it. I think we could see the dollar continue to trade sideways for a while. I don't see the dollar rallying right away. I do think we're seeing the equities market start to shine. It's coming back to life. We've had a pretty broad market rally over the past couple of trading sessions here at the beginning of August. And I think the dollar is going to trade sideways until maybe the stock market starts to stall out. And then we'll probably see the dollar start to pick up speed and breakout again.

while the equities market rolls over. So the dollar here is at support. I think it's going to hold its ground over the next month or two. and I think that's, you know, it's going to probably keep a cap on precious metals. Metals may drift higher, which we'll we'll touch on shortly, but I don't see the dollar breaking down just yet. It really has technically just entered a bull market and it does, it still has a very strong chart.

Craig Hemke (04:46.849)
So maybe not quite the headwind that it was, but not necessarily a tailwind yet either. you mentioned equities. I I think that'd be a fun thing to touch on next. I know when we spoke back in early July, you're like, man, I I think there's one last or not, maybe not last, but another big rush in US stocks coming here. And over the last three or four days, boy, have we seen this. We record this SP trading at new all time highs.

Chris Vermeulen (04:50.618)
Right. Yeah, yeah.

Craig Hemke (05:16.641)
What do you see? Pick whatever index you want. What do you see in stocks and kind of as that kind of bleeds over to all risk assets? I think it's kind of important to keep an eye on.

Chris Vermeulen (05:25.742)
It does. I mean, if the equities market's going higher, we pretty much see almost all stock sectors go higher. and recently we've seen really precious metals rally with the with with equities as well. So the it's important to understand what the major indices are doing. Now, when we look at the QQQ, which is the Nasdaq 100, we we actually just had a cluster of cycle lows come into play here. And you know, we saw we saw some big flush out, a lot of panic, a lot of people moving out of the space.

Craig Hemke (05:49.485)
Mm-hmm.

Chris Vermeulen (05:55.195)
It's actually very similar to the cluster of cycle lows we had over here. we saw, you know, some big panic selling over here. We saw some big panic selling, very similar style selling. Doesn't mean the market is breaking down. It just means it's correcting. And and now we're getting this knee-jerk reaction out of here. And what's interesting, Craig, is the Nasdaq is still pretty far from its highs. When we look at the S P 500, we have it breaking out to new all-time highs. It

Craig Hemke (06:00.437)
Yeah.

Craig Hemke (06:07.18)
Yeah.

Chris Vermeulen (06:22.884)
If we look at equal weighted SP 500, it's been going the exact opposite. We're seeing the stock market as a whole just moving higher. This is a very strong sign. This is telling us money's money's pulling out of the big tech and the AI because they big money's starting to think, hey, it's getting volatile, which means it carries more risk. It's in a bit of a bubble phase. It's starting to get some bad news. So we saw money pull out of big tech.

And it instead of exiting the equities market, it's been rotating into other stocks. It's not like it's running for safety. It's just saying, no, I want to get into some different stocks that aren't quite bubbly and and volatile. And so the fact that equal weighted has been moving up is a is a pretty good sign. And you know, I just mentioned this the other day, like the IWM a couple days ago looked like it was primed and ready as well. It also had a cluster cycle low. It's starting to pop, and small caps are on the verge of hitting some all-time highs.

And so is the micro caps. Micro caps, they're not quite up near the highs, but there's big moves in micro caps telling us people want to put risk on. And going back to your your comment there saying from our last conversation that there may be one more big move in the equities market. Well, if we use our Fibonacci extensions based on the upward momentum of this rally, the strength and the momentum of this pullback, it will tell us kind of where these next upside targets are.

For the QQQ or the NASDAQ 100. You can see just based on where you and I are talking today, which is August 4th, the first target at the 618, which is called the golden ratio, is about an 8% move. And then if it was to rally all the way up to the 100% measured move, it's about an 18%. So there's there's some pretty good upside that we have one final maybe blow off phase that you and I talked about last month, and it could catch a lot of people off guard who are

betting on a falling market. Now I I do believe we're gonna have a big correction at some point, but we don't we don't trade based on what we think and feel. We just still follow price charts. And so the NASDAQ, depending on on the strategy, our when we look at our strategy, we've been long with the the actually has been the the QLD, the 2X CTF, with our band strategy for a while. It's still holding up. It's up about almost 40% from the entry price. And it continues to show signs that it might go another 40%.

Craig Hemke (08:29.297)
Yeah.

Craig Hemke (08:47.757)
Right.

Chris Vermeulen (08:47.928)
know the stock market rallies. So there's some huge potential gains on whether you use leverage or not. The S P five hundred is is we've been long that for a while as well. And of course if we look at the SPY, we actually just hit our first another target today on it, locking in some gains, reducing some exposure. but we're we're long the equities market here and expecting it to go higher.

Craig Hemke (09:12.843)
All right. Well you talk about kind of broadening out the advance, right? That equal weighted SP and the like. Waiting for some of that cash to get broadened out into the mining sector. the second quarter earnings r generally terrific. And we saw some rally and some of these stocks look like they're turning higher. I don't know. Well let's use a GDX or something like that as a proxy. do you see anything picking up there yet?

Chris Vermeulen (09:17.584)
Yep. Mm-hmm.

Chris Vermeulen (09:24.706)
Yeah.

Chris Vermeulen (09:41.883)
Yeah, it I mean, on a short term basis, it's just starting to to turn slightly positive. Now, this is the problem with the precious metal space. There's a lot of mixed signals, right? Which which which makes it difficult. So if we zoom in, what I like to focus on are the moving averages really filter out a lot of stuff. It filters out fundamentals, filters out emotions, all of this stuff. So looking at the trends, we got this long term trend. Technically, gold miners are in a downtrend. They're in a

Craig Hemke (09:44.044)
Yeah.

Craig Hemke (09:48.109)
I

Craig Hemke (09:52.108)
Yeah.

Chris Vermeulen (10:11.632)
The green line moving down and price below it is a bear market. Technically, they're in a bear market. We've got gold miners, the 50-day moving average is sloping down. The pink line, which is the 20-day, is below that. so that is the we are still in a very strong downtrend. Now, if we look at this little thin blue line, this is the five-day, it has crossed above the pink line. So we have a very, very small trend just starting. It's saying, hey, if you're a momentum trader.

Craig Hemke (10:37.502)
Right.

Chris Vermeulen (10:39.312)
This might have a nice little pop to the upside based on that. You know, just looking at this chart pattern, we could say, okay, well, just based on this chart pattern, you know, here's where this tiny little moving average crossover could carry you, which is about to 8050, which again, it's not that much upside from where we are. So this bounce in the market in the precious metal space really is just at this point, is just a bounce within a downtrend. Is

You know, it's easy to get excited and be like, hey, this is the turning point. you know, if you dive in too deep with people who are who are deeply in love with precious metals, they always put a bullish bias on it, right? People like to listen to what they want to hear. but the reality is this is just a balance. It's one of these, it's one of these within a downtrend. See, we can't quite quite trust it yet. The key and and where I kind of stand apart from a lot of different traders is.

Craig Hemke (11:24.055)
Yeah.

Chris Vermeulen (11:32.327)
I don't really care where I get in. I just don't want to hold something falling. And I don't want to hold something if, for example, you know, it trades it trades sideways for a year or two or three. I'd I'd like to get into it. I'll buy it at a higher price when it breaks out and and then it's starting that run. And so what we need to wait for, the way that I trade anyway, is we need to see gold and silver and miners.

Craig Hemke (11:49.803)
Yeah.

Chris Vermeulen (11:58.981)
Really pop and break and breaks a couple previous significant highs, start to build like a launch pad and and show us that you know these moving averages of the 50 day and the 20 day will start all sloping up and they'll be layered properly. They'll be like, okay, now we've gone now we've got potential higher lows. We're gonna have like some higher highs, and it's gonna be starting this new uptrend, which you know eventually I think is gonna have some huge gains in precious metals, but we just don't know.

Craig Hemke (12:11.979)
Yeah.

Chris Vermeulen (12:28.314)
when that's gonna happen. So the precious metal space is turning a little corner as of this week. but again, it's at this point, I really just look at it as a bounce, not the start of a rally.

Craig Hemke (12:29.803)
Right.

Craig Hemke (12:41.825)
Well, and if we're gonna get the shares to rally, well, then we're gonna need the medals to rally too. So we might as well wrap up with those. I I it I I remember talking to last month. let's start with gold. and I remember sharing with this then with people on my side at TF Metals Report about, you know, we were following in twenty-four and twenty-five this pretty consistent pattern. You were helping us out with this, you know, of these

Chris Vermeulen (12:49.596)
Sure.

Craig Hemke (13:07.735)
Fibonacci extensions and going up to that 618 level. And if you got through 618, you were going the full way. And man, did that ever work like crazy on the upside? Well, my concern after talking to you last month was that it was going to work out on the downside. we're holding support near that level, if I remember right, but tell us, give us an update. What do you see now with a more, you know, a whole nother month's worth of daily candles on that chart?

Chris Vermeulen (13:09.5)
They were beautiful, yeah.

Chris Vermeulen (13:32.987)
Yeah, I mean in in a nutsh in a nutshell, the long term trend is down. All the other moving averages are down. You know, we've seen a drop, a bounce, a drop. This is kind of a bearish formation. Maybe we see gold. As I mentioned, the dollar may just trade sideways for a while. The stock market rallies. We might see gold and silver and miners, you know, work themselves higher, but I still think it is a pause at that point, you know, before it potentially starts to sell off in a bigger way.

And that's what we need to be aware of. And and silver's doing the same thing. I mean, a good example of this, Craig, is actually like like Bitcoin. If we were to look at the Bitcoin chart and you know, just go to these patterns, like for example, the hard right edge, you have a sell-off, it pauses, and then it sells off and it has another pause. And you know, you look at this little pause here and you're like, that's a that looks pretty bearish. If it starts to break down, we got another leg.

And that's this is kind of where I feel like, you know, kind of gold and silver are kind of right here. It's been a little pause. And and but what can happen is that pause can continue to trade sideways and it can drift itself right back up to a previous low. And when you step back and look at the big picture, you got a leg down, you've got a pause. You got a leg down, you've got a pause. And while this can be a rally, it's still a counter trend rally. The bear market is still in place.

Craig Hemke (14:33.088)
Right.

Craig Hemke (14:56.811)
Yeah. Yeah.

Chris Vermeulen (14:58.882)
And eventually it'll run, whoops, run into resistance and then roll over. And so I think very similar for gold and silver and and Bitcoin and miners is we might still see these drift higher, but it doesn't actually mean it's starting a new bull market. So if we were to look at silver, silver is kind of doing the same type of thing. It's the the trends are down, it's pausing right here. And I do think we're gonna see most likely silver miners in gold.

Craig Hemke (15:13.131)
Uh-huh.

Chris Vermeulen (15:26.32)
potentially move higher while the stock market rallies over the next few weeks or or a couple of months. But you know, it's it's gonna be what happens after that. Like how how is this price action going to unfold? We we really want to see some bullish price action. Ideally we want to see strong rally, some type of pause in consolidation, another rally, some we really really want to see the moving averages start to turn up. And we don't really want to see a drift sideways because usually they fizzle out.

Craig Hemke (15:51.073)
Uh-huh.

Chris Vermeulen (15:55.527)
So that's kind of what I'm keeping my eye on. Yeah. Yeah.

Craig Hemke (15:56.618)
It just runs out of gas.

Craig Hemke (16:01.175)
Would would there be I are there easily identify you know identifiable levels that you could say, Okay, yeah, this is this is looking better. You know, would it be back above sixty two in silver or sixty five or seventy, something like that? Is there a level like I said, you want to wait until you see the trend change before getting in. What would is there something you can just jump out at you that says, Okay, this is where I would be looking? Or is it too early?

Chris Vermeulen (16:26.192)
Well, yeah, I mean, if you if you if you want to negate the moving ad like the thing with a fifty day moving average is we need fifty days of higher pricing on average for it to start to turn up. So I mean it's gonna take a while, right? if you if you wanna forget that and look at momentum and and pure price action, what I look for is a impulse move. And an impulse move is generally I find two very clean significant highs. So this is a fairly significant high, and this one is another significant high.

Craig Hemke (16:34.529)
Yeah.

Craig Hemke (16:38.402)
Yeah.

Craig Hemke (16:55.106)
Yeah.

Chris Vermeulen (16:55.45)
And so ideally, what I would want to see, you could argue this is a significant high, but I like to use very, very clean ones. What you want to see is a very strong rally that breaks through one and two. If you can bust through two resistance levels, usually that first pause and pullback can be bought. And if it is a very strong move, it actually will turn the moving averages up fairly quickly if it if it breaks those levels because prices.

Craig Hemke (17:10.263)
You go

Craig Hemke (17:21.623)
Mm-hmm.

Chris Vermeulen (17:24.102)
has moved significantly higher. So the 20 day will turn up very quickly. The five day will be above that. The 50 day can turn up and start sloping higher. So that's kind of that would be like the the best case scenario. We see a huge strong move in precious metals. It takes a bit of a breather and a pause. And then obviously if it starts to run and break out again, then you're gonna have that second measured move. And then you know then we could be right back into a full-on bull market and the next big leg higher. So

That would be the way that it turns around the quickest.

Craig Hemke (17:55.34)
Yeah. Might take some positive news out of something, the war or monetary policy or something to get everybody all agitated and excited again. Whatever that might be. Chris, it's all extraordinarily helpful every time we visit. for folks that don't want to wait around till early September to hear from you. my can I I it's like Chris, the front month in in Comex Gold now is December.

Chris Vermeulen (18:02.702)
Yeah, yeah. Yeah.

Craig Hemke (18:23.383)
You know, we kind of skip past October. So we get into August and I'm all of a sudden looking at December gold and it's like, my God, where's this year going? if people don't want to wait till September to hear from you again, how do they find your work? How do they get in touch with you?

Chris Vermeulen (18:23.471)
Yeah, yeah.

Chris Vermeulen (18:38.458)
Yeah, the best Bobby go to my website, thetechnicaltraders.com or go to my YouTube channel, The Technical Traders. I share kind of daily insight and you got a free newsletter if you want to stay informed of what's going on. And if you subscribe and you want to really just know exactly what we're doing and where where we have new triggers in the markets, we have some new triggers, I think, starting to form this week. I will be getting into a sector trade and and some other plays here. You can subscribe to the newsletter and literally copy the portfolio that I trade. We trade ETFs.

And just navigate the markets. You kind of trade and learn at the same time. And we we manage positions and risk. That's what makes us quite different. We do underperform in a bull market, but we make it all back and then some during a bear market. So we're kind of that we're we're delayed gratification, the way we we we do things. It's all about protecting our time, protecting our retirement. we don't want to give everything back. And so it's kind of the flip side, right? It's

Craig Hemke (19:21.058)
Yeah.

Chris Vermeulen (19:33.082)
During big moves like this we're we're underperforming, but when things fall apart, everybody's like, This is the best thing since sliced bread. So it's a very different vibe and energy how we trade, especially during a raging bull market. Always feels like, Hey, everybody's doing better. But that's just the way we trade and manage positions.

Craig Hemke (19:50.633)
And and just so everybody knows, not just precious metals. I mean it's best asset now, whatever that is.

Chris Vermeulen (19:55.802)
Yeah, we focus on the indices. Our our our core core strategy, we focus on the S P five hundred, the NASDAQ. We focus on bonds, the US dollar. We all the precious metal trades are there is they're separate. I share those through the newsletter. They're not part of the portfolio because they're usually long term positions that I put on. So I'll be looking to accumulate physical metals at at some point when I do believe the next big rally is starting. so they do get that. But the core thing is we trade ETFs based on sectors and index funds and bonds and currencies.

Craig Hemke (19:57.901)
Yeah.

Craig Hemke (20:26.711)
Great stuff, my friend. Always fun to visit from you or fun visit with you. Ugh the old man's starting to lose his mind a little bit. All right. Anyway, but thank you for your time. It's always great to get caught up.

Chris Vermeulen (20:31.14)
Yeah.

Chris Vermeulen (20:38.502)
Thanks, Greg. Always a pleasure.

Craig Hemke (20:40.342)
And from all of us, Sprott Money, SprottMoney.com, thanks for watching. But make sure you hit that subscribe button on the way out. Got lots of great content still to come later this month. You don't want to miss any of it. And again, be sure to thank SprottMoney at SprottMoney.com for putting that content out there. Thanks for your time. Thanks for watching. And like I said, we'll see you again as the month of August rolls on.