Gold and Silver Crash Warning Before Massive Rally

Craig Hemke (00:00)
All right, here we go with a brand new month at SprottMoney and SprottMoney.com. The month always begins with the precious metals projections. And here we are now finally in May of 2026. I'm your host, Craig Hemke. And joining me as usual for our monthly kickoff is Chris Vermeulen of the TechnicalTraders.com. Chris, good to see you.

Chris Vermeulen (00:22)
Good to see you, Craig. Always a pleasure.

Craig Hemke (00:24)
Another busy month man. I mean what I the first two months fun the last two months Not so fun. So we'll see see if we can break our streak here in may in the meantime Hey buy the dip That is a great thing to do. Uh, if I told you you get a chance to buy silver at 70 back when we were in uh, Uh, january, you'd have thought wow. So here's your chance

Gold and silver on sale. If you want to look at it that way at SprottMoney.com. Go there. You always find the best deals on physical metal and storage of said metal. You do it all online. Of course you can give them a call and talk to an actual human being. ⁓ Right there. 888-861-0775. And be sure to thank them for all this great content that they put out. ⁓

precious metals projections is something we always like to do right here early part of the month. So let's roll. Chris, ⁓ it has been a doozy. We had all the bad news of March. We had a recovery that now, unfortunately, looks like maybe a bear flag in a lot of things, the shares and the metals in April. The news turned south again, ⁓ week before last.

And it's been a pretty steady decline into the end of April. Chris, I rather than we can't, you know, focus on the news because that's going to change hour by hour, sometimes minute by minute. Your job is to take all the emotion of the news out and just simply look at the technicals. I know one of your key tenets is find the best asset now. So my friend right now, what's the place, where's the place to be? What looks the best?

Chris Vermeulen (02:11)
Yeah, well, definitely the best place at the moment really is to still be is to belong equities. We've had this, you know, super strong rally. We're definitely seeing money moving into speculative stocks and sectors. We've seen the we've seen small caps and micro caps come to life. We're seeing technology, obviously the big technology stocks leading the way, dragging these major indices higher. And so equities is really the play. And if we look at the best asset now,

The top of the list, the best performing with the strongest technicals here is the semiconductors. We have seen a huge explosive move just from the lows really only several weeks ago. It's up 41 % or it had a 41 % move. It's pulled back a little bit in the last few sessions, but overall the best, know, when we look at the hot list, we've got semiconductors, got lithium stocks, technology, energy is still holding up, clean tech, Bitcoin, blockchain.

We got the ARK ETF. So money is definitely moving into kind of the lucrative and speculative plays here. And so that's to me is the best asset. Precious metals have taken a backseat, obviously from the big sharp short-term kind of correction and thing like that. so money's moving into equities at this point.

Craig Hemke (03:27)
That's where it's valuable. I've been sitting on my hands watching all this over the last 60 days and you have been moving things around and obviously doing a great job. I remember you telling us last month about how you watch the equities and if it all, you know, that was already starting to look better in early April and look at what the heck happened.

Chris Vermeulen (03:45)
Yeah, I mean, here like our strategy here, if we just look at the left chart here, it's simple color code. This is following technical analysis, money flows, sentiment and position management. I mean, the S &P 500 daily chart here was trading sideways for a while. It eventually rolled out of losses upward momentum. Our strategy said, hey, it's losses upward trend. It's got mass money flows exiting the market. And then of course we had the straight of hormones news kick in.

I find price action typically leads. It usually gives us an early warning that something is happening. And it's the same. We had the reverse. We had a pop in early April and it went from, turned from a bounce into a rally. And we're seeing the same with the NASDAQ. mean, the NASDAQ's up almost 10 % from our entry price. So we're seeing this very strong move and you you gotta be long, whatever, wherever the money is flowing, you wanna hold those, right? And so that's where we are right now is,

The sentiment is strong, which we can see on this right hand chart, these green bars, that's telling us that not only is the trend up, but investors are piling and pouring money back into the equities market. And so we want to ride the coattails of the money flows. It's not about trying to identify when it's going to put in a bottom, when it's going to put in a top, let it put in a top and a bottom. And then we'll just identify with technicals, where's the trend and do we want to take part of it? And so right now we're long equities and of course,

The flip scenario for precious metals is it has no real trend that we want to trade at this point, which we'll get into in a minute.

Craig Hemke (05:14)
Yeah. Don't fight the tape would be one way look at that. You want to do one of them Fibonacci deals on there with the NASDAQ, the Qs or the whatever SPY and let us know how far this rally might run.

Chris Vermeulen (05:21)
you

Thanks

Yeah, I mean, we can we can look at the Fibonacci. We'll drop down to the weekly chart just to make the bars a little bigger for viewers here. Using Fibonacci based on the sequence here of where this market has potential to run roughly, the S &P 500 could move all the way up to about 8,500. And so that is a obviously a very significant move. That is about a 20 % move. That is if this larger wave pattern actually plays out.

and we start to see that extend to the upside. So there's quite a bit of upside potential. Do I think it's going to get there? I doubt it. But I mean, when we go back and we look at some of these these other chart patterns back over here, I mean, we've seen 20 % moves happen, you know, year after year, these moves just keep on going. So as you just said, you do not want to fight the tape. The the money flows are going into equities, you should be long stocks, and there's a lot of upside potential along the way. So

That's definitely where that is going. The NASDAQ is very similar. If we pull up the NASDAQ chart percentage wise, the NASDAQ usually can make, have bigger moves, big, bigger potential. And so if we were to just look at where that upside target could be, we're looking at the NASDAQ running to about 32, 800. It actually ends up being about 20 % as well. So I think there's some great opportunity here. think, you know, we need to be long equities, but again, we're in this like kind of landmine of

Craig Hemke (06:46)
Peace.

Chris Vermeulen (06:56)
⁓ of news and events happening. So things are popping and dropping, again, that's what the market rallies on, right? It rallies on a wall of a wall of fear. And this, this giant impulse move that we've had is very, very similar to this one. And then we go into this slow grind higher. And that's what we could go into. it constantly, those slow grinds constantly make you feel like is about to top. It's about to drop.

Craig Hemke (07:16)
Yeah.

Chris Vermeulen (07:25)
You know, this trend is coming to an end, but the market just keeps grinding through that wall of worry. So that's kind of where we are. The quick, easy pop has been made. Now it's like, is it going to grind higher? We've got big earnings, big numbers coming out from, you know, the big tech companies. We've got ⁓ what's going on in the Middle East. So there's going to be a lot of probably chop and volatility, but overall the underlying trends are up. And ⁓ that's, that's the key spot right now, I think is equities.

Craig Hemke (07:52)
Well, that'll make Mrs. Hempke happy. ⁓ Mr. Hempke, on the other hand, is getting his fanny kicked, ⁓ watching the precious metals and the mining shares do their thing. Where should we start? Maybe, ⁓ you know, the daily is just everywhere. It's been lousy for the last couple of weeks, but it's just, you know, and it's just for traders, obviously it's significant. For the long-term holders like me, though, you know, you got to find that secular trend that reveals itself.

Chris Vermeulen (07:54)
Thank

Yeah. Yeah.

Craig Hemke (08:21)
not just in the weekly, but the monthly chart. So

why you run with those and let us know what you think.

Chris Vermeulen (08:26)
Yeah, I mean, the monthly chart, I think, is very important to follow. Let's just zoom way back in time. And obviously, we've seen a series of these parabolic rallies in precious metals, these big spikes, which usually resolve, obviously, to a sharp correction, which is just part of typical price action. It doesn't mean it's a bad asset. It doesn't mean anything significant other than there's a lot of volatility in the near term. But when we look at gold here, you know, we've had this

There's this gap higher on the previous month. It has sold down and now we're continuing to work our way down. I think there was this huge euphoric phase that everybody piled into metals. I mean, it was, I haven't felt that excitement and watched my account grow by leaps and bounds like that in many, many years. So, I mean, that was really, really exciting time for almost everybody in the space. But now it's come to an end, right? After you finish a race, you finish some adventure.

Craig Hemke (08:59)
Mm-hmm.

Yeah.

Chris Vermeulen (09:20)
You know, I climbed Kilimanjaro last year and after you're done and you get home, you're kind of like a little bit bummed out. You're like, well, the excitement is kind of over and it might, I might not have something super exciting for a long time again. And so that's where we are with, with gold and silver is we may see several more months of potentially sideways or it might drift lower for a while. And you know, every bar here is 30 days. So we could easily see three, six months just.

Craig Hemke (09:28)
Yeah.

Chris Vermeulen (09:48)
Vaporize and just kind of as time figures itself out the chart pattern the trends are still up But there's no doubt short term wise it is clearly in a downtrend And we just need to let that downtrend work itself out before it stabilizes and then builds a launch pad to go up So, you know the precious metals pocket that that space it's it's had a huge move It's had its excitement for a while and now we just need to let it to let time do its thing Let the charts heal and build a new launch pad

Because at some point we're going to see, you know, another big move to the upside. Like we've got the low back in 2015, 2016. And based on this super cycle that's at play, depending where gold pulls back, we can, you know, we can get an estimate of where this next leg will go. That next leg for gold is about 8,600 based on that full cycle.

Craig Hemke (10:38)
Okay,

that's fine, I'll take it.

Chris Vermeulen (10:41)
Yeah, I think it's beautiful. The

short term charts like the daily chart and the weekly chart are actually pointing to gold potentially coming all the way down to about 3500, which is the breakout point just where where everything went in that euphoric phase. You and I talked about this in our last our last talk early April. So if gold does fade down over the next several months and sell off potentially with the equities market at some point, then the target comes to about eight thousand. But either way, there's a lot of upside potential.

Craig Hemke (10:54)
last summer.

Chris Vermeulen (11:11)
But we just got to, the chart has to put in its time to build a new launch pad, turn a corner and start to head higher and go from there. So I think there's a lot of potential in gold to hopefully pick it up, add to the stacks at a lower pile, at a lower level, and then be able to catch that next big rally going forward.

Craig Hemke (11:29)
Chris, don't you realize it's 2026. I want this to happen next week. Now, how things go, you're supposed to double your money in a month and that sort of thing. right. We held on. I mean, it was a long journey in the desert. You point that out, 15 and 16 and even 21 and 22 were not much fun. But the trend is higher. And if you believe in what's going on, you believe in the devaluation of fiat currency, then buy the dip for crying in a bucket.

Chris Vermeulen (11:33)
Yeah.

Yeah.

Yeah.

Craig Hemke (11:59)
Again, the nice people that's brought money will be happy to help you to do that. I would imagine you see similar things in the charts of silver and the GDX. Yes?

Chris Vermeulen (12:09)
Yes, for sure. They're obviously just more volatile percentage wise, but they are all the same trade. They typically all rally together. They all sell off together so people can just mix between them all and try and get the best average return on them. When we look at this monthly chart, well, we'll just zoom way back in time. Everybody has seen these chart patterns, obviously parabolic spikes end up with a very sharp pullback. And so now it needs to stabilize and

And the question is how long will it take to stabilize? But overall the chart of silver, mean, just based on the current price action, the low was in 2020 where it actually put in a peak, a significant trough there. We can get a gauge of where some of these upside targets are for silver. Yeah, so silver, if it has put in a bottom already over the past, like last month, then the upside targets around 172. Now, which is pretty exciting.

Craig Hemke (12:54)
is going to be a fun one.

Okay.

Chris Vermeulen (13:08)
If silver pulls back, potentially the technicals are actually showing a pullback all the way to on the daily and the weekly chart all the way down to about $40 an ounce. So if it flushes down, gold and silver sell off, that will probably mean obviously the equities markets are selling off in a big way. The dollar's probably rallying. So we have mass outflow of selling of assets plus a strong dollar that could send silver sharply lower.

And if it comes all the way down there, then the next upside target is about 151, which is still pretty, pretty amazing price going forward. But again, we have to let the metals figure out what they want to do. Are they going to build a tight launch pad here and just take off and hit those upper targets? Or are they going to flounder and go under some more pressure before they find a base, build a base and start to go higher? So that's kind of the big picture when it comes to to silver. And so the sweet spot really

in metals to me is, you know, it's got this big volatility range. Gold is doing the same week. If we pull up miners, they're pretty much the same as well. They're in a territory right now where I don't really want to touch them. I just want to let them unfold, let them build a launch pad here, reset. And then once it starts to show a new confirmed uptrend, a new major bull market starting, then you can jump on and get a little more greedy in terms of putting some good position size, catch.

Craig Hemke (14:12)
I'm gonna go.

Yeah.

Chris Vermeulen (14:33)
catch another one of these explosive moves to the upside. you gold, you kind of mentioned back 2022. If we zoom back over here, you know, we saw in 2020 gold and traded sideways and kind of trade sideways for several years. It was pretty boring. But when we look back at the chart, we're like, my gosh, this is, this is like trying to break out. And when it breaks out, it is just going to go absolutely ballistic. So as boring as it was, it was

The longer something trades sideways, the bigger the potential move afterwards. And I just remember when this started to break out how exciting it was. I mean, now that that moves come to an end and now we need to, we need the markets to do something like this, put in a pause or put in like a bull flag where it potentially trades sideways for who knows? I mean, many months, I think. And then when it starts to turn up, I mean, it's going to be like game on again.

Craig Hemke (15:11)
Mm-hmm.

Chris Vermeulen (15:29)
Exciting phase. If this has a ⁓ very strong bullish chart pattern, we're going to get another one of these, which is really exciting versus something that sells way off and then takes forever to rally back. It won't quite have the same momentum. So we all should be thinking and hoping for a tight pattern here because it'll mean an explosive big leg like this again. We don't really want it to go down from that regard because people want action like now.

Craig Hemke (15:37)
Yeah. Yeah.

Yeah.

Chris Vermeulen (15:58)
So the tighter the pattern here, the quicker the reaction we're going to get out of it. But if it flounders down to 3500, it's going to be a much slower climb and not quite as exciting.

Craig Hemke (16:09)
long ways back up. Yeah, mean,

60 % back up to get to the highs. And for skeptics out there, fundamentally, if you think this all turns into some kind of demand-driven global recession and liquidity squeeze, how do you think the central banks are going to respond? I mean, if they printed $5 trillion to the Fed's balance sheet in 2020, what do think they're going to do this time? So there's a fundamental basis as to how we can get to $8,500. But Chris, in the short term,

Chris Vermeulen (16:30)
I know.

Craig Hemke (16:38)
Obviously, we've got headline risk and geopolitical risk and everything else with it. I want to close with ⁓ just picking your brain from a technical standpoint. In the midst of all of the central bank selling and everything else that we saw in the middle of March, gold went down, I think it was March the 23rd, and briefly violated its 200-day moving average. And then, boing, went straight back up. ⁓ Silver and the GDX did not make it down to...

their respective 200 day moving averages. But those levels have continued to climb and now price is rolling back over. How important of a signal in your mind is that 200 day? ⁓ And should we bounce or break it ⁓ if we do head back there?

Chris Vermeulen (17:26)
Yeah, so I don't follow the 200 day. I do use the 100 150 day, which is very similar. It just it just reacts a little bit quicker. Let me pull the chart up here so you can see this. So if we take a look, my the green line on my chart here, this is the 150 day, which is very similar to the 200 in a way. And so, yeah, we came all the way down. The 200 day was like right down at this wick low. So that's the one you It bounced off there and then now it's rolling back over.

Craig Hemke (17:30)
Okay.

Okay.

Yep, there you go.

Chris Vermeulen (17:56)
To me, the 150 day is a very powerful tool. Usually, when it's ⁓ sloping up and prices above it, you're in a bullish environment. When it is rolling over, sloping down and prices below it, you're in a bearish environment. A really good example of that is actually just take a look at the Bitcoin chart. If we look at the Bitcoin chart, you've got the green moving average sloping up and prices a series of bull flags. And then suddenly price breaks below it and it's a series of bear flags.

you know, when we look at gold from that perspective, gold is still trending up. The moving averages are moving up. It is having a big correction and pullback. This, this you could argue very easily. This is a giant potential bull flag forming right here. And when it, when it hooks up or when it finds support and starts to rally, I mean, it is going to be off, off to the races. And that's based on this. If gold finds support and actually starts to move higher and

Craig Hemke (18:40)
Yeah?

Chris Vermeulen (18:52)
and say breaks this high around 4,900 or starts to close around 5,000, we could be off to 8,800. That's what this chart is pointing to. So that's what we need to wait right now. We just need to wait and see, is this a top and we're still going about 20 % lower or is this a tight bull flag and it's gonna hook up here in the next month or two and then be off to the races because chaos hits or who knows what will help spark that. So.

That's just where we are in the precious metal space. It's going down, it's highly volatile, it's somewhat trendless from a trader standpoint. And to me, the money flow right now is inequities. People are excited. It's kind of a resurgence of AI excitement. Semiconductors are leading the way. Of course, it doesn't matter how well a company does. An AI company, they're still gonna need the equipment, which is like the semiconductors, right? They're the core of it, so.

Yeah, precious metals are on the sidelines. just have to wait every month. You and I update. just have to wait until these monthly major trends kick into an uptrend and then it's like start stacking and then riding that higher, right? It's just a matter of time really.

Craig Hemke (19:55)
Right.

In the meantime, ⁓ back to the daily chart there, just real quick, Chris, ⁓ that 150 day moving average that gold tapped a month ago ⁓ and then bounced, looked to me, to my eye, that that's about where we are right now. Can you zoom in on that thing and tell us, yeah, what is that level? It's like right now, isn't it?

Chris Vermeulen (20:03)
Whoops.

Yeah, right at the 150 day. we're pretty much right at it at 45, know, $4,575. $4,500 is kind of that critical level. But I think one of the key things when you go to a long term moving average, I think it's any moving average, you do have to give it a lot of wiggle room. I'm not a big fan of like, you know, dead on I'm like, it just needs to pierce through it or trade near it. There's kind of a range. It's kind of a zone where it should find support. But there's no doubt we're right on that.

Craig Hemke (20:34)
Okay, there you go.

Yeah.

Chris Vermeulen (20:53)
on the cusp there of ⁓ finding support. And when we zoom in a little bit more, the moving averages are pretty bearish. We have the 50 day moving down, we have the pink, which is the 20 day and the five day below it and prices below all of those. So we are actually in a downtrend with gold and based on this chart pattern, I mean, people don't really wanna hear this, but oops, based on this chart pattern and using the Fibonacci sequence here,

Craig Hemke (21:01)
Yeah.

Chris Vermeulen (21:21)
The next move down in gold actually does bring us down to like 35, 3,600. That's where this sell off and move is pointing to, which I think is going to shock a ton of people who don't follow technicals and who follow fundamentals. Because fundamentally gold and silver should be like, keep going higher and higher. there's every year is a better, the perfect storm for metals to keep going up. But I have learned that.

Craig Hemke (21:25)
Yeah. Yeah.

Chris Vermeulen (21:46)
You know, it doesn't matter what the news or the fundamentals are. Price still has a mind of its own. It's still driven by supply and demand. And so that's what trumps, you know, the fundamentals most of the time.

Craig Hemke (21:58)
And they're trading machines that follow all that stuff. And so it kind of becomes self-reinforcing. as I've told people, mean, gold fell a thousand dollars in March because the yield curve shifted up 50 basis points, a dollar rally three points and Turkey dumped a hundred metric tons. If that happens again in May, well, okay. I mean, there's not much we can do about it. So we will continue to watch closely. ⁓

Chris Vermeulen (22:01)
for sure.

Yeah, look out below.

Craig Hemke (22:26)
But Chris, you do great work and it is very helpful to get your perspective every month. And this month seemed like even more so than usual. So thank you so much for your time. It's been great to visit with you.

Chris Vermeulen (22:37)
No problem. Thanks for having me. Always a pleasure.

Craig Hemke (22:41)
TheTechnicalTraders.com, correct? All right. You want some additional help, check him out. TheTechnicalTraders.com. And again, keep your eye on this channel as well. Hit the like or subscribe button because there's going to be all kinds of content coming again in the month of May as there is every month. You don't want to miss any of it. For now though, we'll sign off. Thank you for watching. Have a great rest of your day and keep an eye on the SpropMoney channel for more information as the month of May unfolds.

Chris Vermeulen (22:42)
Yeah, that's the best spot to go.