Gold and silver may ultimately have substantially further to run, but technical analyst Chris Vermeulen says the precious metals complex has yet to prove that its next major bull market is underway.
Despite forecasting eventual targets of $8,500 an oz. for gold and $175 for silver, the founder and chief market strategist at The Technical Traders said that both metals remain technically in a bear market, with longer-term moving averages still pointing lower. He wants to see prices establish a base and momentum turn decisively higher before committing serious long-term capital.
Mining equities may be providing the first indication that such a shift is coming. Vermeulen said miners have broken significant resistance and are outperforming the underlying metals — a pattern that can sometimes precede a broader move in bullion.
“They’re bucking the trend. They’re leading the way,” Vermeulen said. But he remains cautious, warning that the recent rush into miners may also reflect investors attempting to pick a bottom through higher-beta exposure.
If the metals complex does confirm a new bull phase, however, Vermeulen sees considerable upside. His technical projections point to silver reaching about $175 an oz. and gold around $8,500 in the next major advance — levels he described as only the “first wave.”
Vermeulen also cautioned that the downside has not disappeared. If gold’s current bearish technical structure persists, he said the metal could still retreat toward $3,300, which he identifies as a major support area.
Watch the full Top of Mine interview above for Vermeulen’s outlook on gold, silver and mining stocks, as well as his forecasts for $100 oil, another potential leg higher in technology stocks and mounting pressure in the bond market.
