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Precious Metals Projections

Precious Metals Projections October 2023

Craig and Chris on Precious Metals Projections Banner

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In today’s episode, listen to Craig Hemke and Chris Vermeulen discussing the dynamic landscape of the precious metals market, as well as:

  1. The potential for a new rally, with a focus on technology stocks and seasonal trends.
  2. The impact of panic selling in the stock market on gold, silver, and mining assets, and the potential for precious metals to rebound.
  3. Analysis of various mining ETFs, including XME, GDX, and others.
  4. Critical price levels to watch in gold, such as the $2000 mark, and the potential for a relief rally.
  5. Silver price trends, levels of support, and resistance, and the factors that could influence silver's performance.
  6. Watch or listen to the latest “Precious Metals Projections” now. 

Craig: Hello again from Sprott Money News, sprottmoney.com. It is now the month of October. We are into the fourth quarter of the year 2023. It is time for your monthly "Precious Metals Projections" call. I'm your host, Craig Hemke. Joining us as usual for this call is Chris Vermeulen of The Technical Traders. Chris, always good to see you.

Chris: Right, good to talk. Yeah.

Craig: No seeing Craig today. We are dealing with some technical challenges here at my office. And so, hey, I don't think anybody's complaining that they don't get to see my mug. So, that's, I'm sure there are no complaints coming in. They don't have to look at my face on this deal. You should at least though see on your page the sponsor of these calls. Sprott Money, of course, should be a bullion dealer of choice. Always great deals at Sprott Money, and as you can see right now, free shipping on any orders of $300 or more. And heck, why ship it when they'll store it for you as well? You can see the phone number right on this page, 888-861-0775, and please, again, thanks Sprott Money for this content by visiting their business site, sprottmoney.com, or at least giving them a like or a subscribe on whichever channel you're watching.

Chris, we're rounding the turn and headed for home. We're sprinting past the quarter pole, with one quarter to go. Let's start with what you do the best, which is best asset now. It's the first week of October. On your screen, what is the best asset now?

Chris: Yeah. I mean, the stock market looks like it's trying to change gears, and start a new rally. When you look at the big picture here, from 2022 decline to the 2023 rally, we kind of look to the right-hand side. We've had a really nice move, whoops, and a really nice move to the upside here, very strong trend up. We've now had a nice, what could be a bull flag pattern. And believe it or not, based on cycle analysis and money flows in the market, where we are right now, as you and I are speaking, is actually very similar to the cycle setup, the money flows that we saw right here, before the stock market took off. The SP 500 had a half-decent rally. The NASDAQ rallied a lot more. And so, we're very close to, potentially, another big rally that could bring us up to the all-time highs, which you and I have mentioned before, on our last call, that the market could go into this end-of-year rally. Seasonality-wise, October is a very strong turning point in the market, that if the market gets traction, it rallies usually into the end of the year.

So, the fact that it has a bull flag pattern, we've got a cycle low, similar to what we saw before we saw this previous move, is a very encouraging sign that this market, it's gonna wanna go up, and give everybody a nice Christmas gift, which is higher stock prices. The question is, what, if it gets up here, what does it do? Does it poke to new highs, nominally, and then gets slammed with huge selling? That we have to wait and see, but it's interesting. Stocks are back in favor. Technology is kind of leading the way. In fact, if we take a quick look at the kind of the best asset now, HACK, which is a cybersecurity ETF, is actually performing very well. It's had a very strong pop. It is just fractions of a percent away from hitting some new multi-month highs, and could really have a big, strong rally here going forward. So, it's gonna be very interesting to see how things unfold.

Technology definitely leading the way. We've got ARK ETF, semiconductors, the tech sector in general, holding up better than pretty much most other sectors. So, it's still a tech-heavy, you know, leaning towards the NASDAQ outperforming the SP 500. So, that's kind of the overall take. Now, when we look at the market, we had a lot of panic selling over the past month or so, and we've seen the VIX spike up. We've saw tons of people buying put options. Everyone's either selling their positions or buying leverage, betting on lower prices for stocks. This market condition that we saw about a week, over the past week, is actually the same type of fear and put-call ratio setup that we had back over here. And when most people have bailed out of their positions, that's usually when the market puts in a bottom.

And the reason I bring this up is because panic selling leads to sell-offs in gold, silver, and miners. And while the stock market sold off, we also saw gold do the same thing. We saw gold just go off a waterfall sell-off, and that's because there was panic selling. And now that the stock market might be starting another rally, I think we could see precious metals do very well going forward here, regain what they lost over the past two weeks, and then potentially push up and start to try to put some upward targets, you know, to this $2000 mark again for gold itself.

So, it's gonna be an interesting scenario here, now that the selling panic pressure I think has alleviated. I think assets can now float back up, and the question is which assets are gonna float up the fastest? I think precious metals could come back to life here. Not saying it's gonna make new all-time highs, or start a new major rally. I think this move here in precious metals will just be kind of a relief bounce in price. I still think there's gonna be lower prices in gold, you know, several months from now.

Craig: Well, if the sentiment is changing, that would certainly help, because the sentiment has been terrible, so maybe could get that little Christmas gift, as you said, with at least a little bit of a relief valve rally out. There's some talk out there about the macro as well, and maybe stocks are picking up on that, with maybe the Fed being done, and eventually turning to pivot as we get into next year.

You mentioned, let's stick with the equity theme. Can you tell me a little bit about some of the mining ETFs that might be on your radar?

Chris: Yeah. Well, believe it or not, actually, another one here is, I think it's XME is the symbol. It's actually performing fairly well. I mean, a lot of, most sectors are kind of stuck in a major sideways range. But XME's actually holding up very well, and this is kind of a mining type of, base metal miners. There are some precious metal miners in here. And one of the reasons why I like this is because it can move up even while gold miners are actually moving down. So, this has the benefit, if gold miners go up, it'll help this ETF, but overall, if just the overall demand for mining and materials continues to stay up, this ETF can move very, very fast to the upside. But if we go and we take a look at, like, GDX, which, GDX and the silver miners, they're all very similar charts. They are very oversold. They had lots of panic selling, which pulls them down, and now they're having a knee-jerk reaction. To me, it's kind of an oversold bounce, and we might see a little bit more traction in these. But again, it's just, at this point, it's kind of a relief rally, and I think this market, the precious metals space, is definitely struggling, because it is making a series, a long-term trend here, down, of lower highs, lower lows.

If we go back on the chart a little bit, you can see we had a significant consolidation, and then a lot of recent highs that formed through here, that is right where we saw support get tagged about a week ago for the gold miners, and they're bouncing. So, you know, there isn't a really bullish picture right now, I don't think, for miners. I think they might have some, might spark a decent rally, but I don't think it's gonna be anything life-changing yet. So, they're still struggling. And a really good, actually, view to look at precious metals space as a whole is this ETF, GLTR. If I look at it from the monthly standpoint, we can see what the basket of precious metal miners are doing as a whole. So, this ETF actually holds gold, silver, platinum, and palladium. And you can see the pattern here. It's a beautiful cup-and-handle pattern. And while it still might consolidate longer here, this, a cup-and-handle pattern is a very big pattern. Usually the depth of the cup, if this is a true cup-and-handle pattern, can be multiplied on top of that level three to four, even five times in some cases. So, there is a really bullish story for the whole precious metals space, as a whole, once this cup-and-handle pattern, this market kind of correction in metals finally finishes. So, it's pretty exciting.

Craig: That would seem to be a good one to watch. I'd not heard of that one. GLTR. I think I'll put that on my own radar. Like you said, that handle can continue to play out. I would imagine, if we go back to that gold chart, we need to see some type of break of that pattern, of the lower highs and lower lows. We haven't seen that yet, but can you...is there, for people, you know, if they're just out there watching the price, is there a price level or two that maybe, should we break out a little, get a little higher to the upside, a price level or two that people go, "Okay. Maybe the worst is behind us."

Chris: Yeah. I mean, there's a lot of, if we just zoom in on the chart here, there's a lot of lows. If I was just to draw a horizontal line across...or sorry, these highs, there's a high here, there's a high here, another little high there, another one here, another one here. So, the closer all these highs are together, when the price starts to rally up, anybody who is short, when it starts to break these highs, those shorts are gonna start to cover. So, it creates, like, it triggers stop orders, buy orders from the short players. And the closer they're and the more they are clumped together here, one wave of stop orders could trigger enough buying to push it to the next one, which triggers another wave of stops. And it can create a very strong pop and move. So, there's definitely a nice layer through here of clustered highs, that if we get up to this level, we could blast through it and get above this $2000 mark, which is kind of this last little high. And then from there, if it consolidates and builds a very bullish, kind of a bull flag pattern, it could be primed and ready to pop and break out, and maybe go up and test, you know, new all-time highs.

So, that would be, like, the threshold. $2000 is also a whole number. And typically, traders and investors are like, "Well, if it gets to $2000, I'm gonna sell it." Or if it drops to $1800 or $1900, like, these whole numbers, like decade numbers, century numbers, thousands, they act as resistance if you're below them. So, $2000 is gonna act a little bit as a resistance. If you're above it, people are gonna say, like, "Oh, if it drops back to $2000, I'm gonna buy some more." So, those levels are really critical, and this little cluster here, of stops, for anyone who's short gold, should be enough to muscle it up above the $2000 mark, change that momentum to, from a downward momentum to an upward momentum, and any pause or pullback could potentially be bought, because we might end up going up and hitting new highs, and maybe the worst would be over for gold at that point. So, that's kind of the most near-term bullish case for gold that I see in those kind of critical levels.

Craig: Chris, I don't know if you've noticed, but I'm still having some technology issues on this end. I've been on and off this call while you've been speaking, so that's been fun. Maybe we better just move to wrap up while we can. Let's have one good look at the silver charts. I know a lot of folks watch us, or are stopping by Sprott Money on a regular basis, and adding to their stack of silver. It's been quite a decline, so, you know, your dollar and your Canadian dollar go a little farther these days in adding to that stack. Again, though, a series of lower highs, lower lows. Is there a level to watch, either as support, or but then also resistance if we get going back to the upside? What are, again, some levels for folks to watch?

Chris: Yeah. I think it, silver is a little more spaced out. We don't have a bunch of levels really close to each other, like we did with gold. We've kind of got a high and a high. They start to get a little closer when you get up into this range here, but overall, when you look at silver, you know, I think above $24 could be, you know, the tides are turning for silver. It will have broken two little pivot highs. And then if it can consolidate and hold its ground, if it can start to run these highs around $25.20 and $25.50, it could really pop right back up to this $26, $26.50. It has to do a lot more work to get up there. There isn't, like, a really clean break, I don't think, as, similar to gold. But overall, I can see this getting right back up into this $25 range, and then getting up to this $26.50, potentially during the next several weeks here, if the stock market goes into a rally mode, the dollar starts to stall out. The dollar does look like it's very close to starting to pull back a bit, and that is gonna also help fuel precious metals higher, because, first of all, we're not gonna have any panic selling holding it down, and then the dollar is falling, so there's definitely an upward potential here for silver to that $25, $26 level before it runs into some serious overhead resistance.

Craig: Well, and like you said, I think that would help all of us that focus on the metals to feel a little bit better. The last couple of weeks have been challenging, no doubt. But it's very interesting time of the year, no doubt about that too, Chris. It's always fun to visit with you. I look forward to seeing where we are by early November, but in the meantime, please remind folks that they don't have to wait until November to hear from you again. Where can they find your work?

Chris: Sure. Yeah. If you like what we're talking about here, and you like it and want it in more depth, and my ETF trading signals, you can go to thetechnicaltraders.com, and we've got trading strategies here to trade the hottest sectors, to trade the indexes and bonds, and be able to play these tidal moves, or these wave-like patterns that happen in the markets. And we can do it trading ETFs, which make it a really simple strategy. We don't have the volatility of individual stocks. I cover gold, silver, and miners, and energies as well. But you can go to the website and learn about the strategies, and go from there.

Craig: Chris, great stuff. We promise next time we'll be able to do this as usual, back with normal. Again, please always visit sprottmoney.com any time you are in the market for physical precious metal. That's the site you wanna go to. But of course, you can always give them a call at 888-861-0775. From all of us at Sprott Money, thanks for watching, thanks to Chris for his help, and we'll have more content for you on this channel as we go through the month of October. Have a great day, everyone.

Chris: Sounds great. Take care.

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About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

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