Gold & Silver in a Selloff? Why Everything Can Fall Together | Chris Vermeulen

February Precious Metals Projections & Market Analysis - Summary

Key Concepts:

• Fibonacci Extensions & Retracements: Technical analysis tools used to identify potential support and resistance levels, and price targets.
• Stage Analysis: A method of identifying market phases (accumulation, markup, distribution, markdown) to anticipate price movements.
• Euphoric Phase: A late-stage market phase characterized by excessive optimism and rapid price increases, often followed by a correction.
• Asset Revesting: Strategically shifting capital between asset classes based on market conditions and anticipated performance.
• Measured Move: A price projection based on a previous price pattern, often used with Fibonacci extensions.
• Bullish Pullback: A temporary price decline within an overall uptrend, offering a potential buying opportunity.
• Herd Psychology: The tendency of investors to follow the crowd, often leading to irrational market behavior.

I. Market Overview & January Recap

The discussion begins with a review of the exceptionally strong performance of precious metals in January 2025. This surge in demand was attributed to increased investor awareness following positive press coverage. However, this momentum abruptly halted last Friday, prompting a focus on identifying the “best asset” for February, particularly considering tax planning season for Canadian (RRSP) and US (IRA) investors. Spratoney.com is highlighted as a resource for investing in physical precious metals for retirement savings.

II. Equity Market Analysis

Christopher Vermuan of technicaltraders.com notes that while the stock market has been on a “tear,” it’s showing “mixed signals” and is “grinding its way higher.” Both the S&P 500 and NASDAQ remain in long-term and short-term uptrends, but volatility is increasing. The recent influx of capital into precious metals suggests a shift in investor preference, seeking the “best asset now.” The S&P 500 is described as “noisy” and “choppy,” indicating uncertainty.

III. Gold & Silver Price Action – The Recent Rally & Correction

The core of the discussion centers on the recent dramatic moves in gold and silver. Both metals experienced approximately 20% rallies, followed by sharp corrections. Vermuan emphasizes a pattern observed over the past several years: rallies of around 20%, followed by parabolic moves after hitting Fibonacci extension targets, and subsequent consolidations.

• Gold: A Fibonacci target of $5200 was reached, followed by a parabolic spike and subsequent shakeout.
• Silver: A target of $106 was hit, triggering a “feeding frenzy” and euphoric phase, followed by a significant correction. Vermuan notes that he predicted a potential surge to $120-$140 for silver once $106 was broken.

The correction experienced last week saw a 37% drop in gold and a 34% drop in silver, mirroring a similar pattern observed in 2011. Vermuan attributes these corrections to herd psychology and the unwinding of speculative positions, rather than solely to market manipulation.

IV. Comparing Current Market to 2011

A key analogy is drawn between the current market conditions and those of 2011. A comparison of weekly silver charts from 2026 (current) and 2011 reveals striking similarities in price action: a parabolic rise, a subsequent correction of roughly the same percentage (34-37%), and a period of consolidation. This suggests the possibility of a similar trajectory going forward.

V. Potential Scenarios & Trading Strategies

Vermuan presents two potential scenarios:

1. Sideways Trading/Top Formation: Metals trade sideways or experience further declines, potentially coinciding with a financial reset in the equities market.
2. Quick Pullback within a Bull Market: A short-term correction followed by a resumption of the upward trend.

He advocates for managing positions cautiously, having closed out a significant portion of his physical metal holdings at $113 for silver and $5300 for gold on January 29th (Wednesday). He retains a balance of his position to observe further developments.

Specific Trading Recommendations:

• Silver: Vermuan is cautiously bearish on silver, suggesting potential downside to $70 or even $58. He recommends trimming positions if silver bounces back to $94-$99.
• Gold: He is more bullish on gold, believing it could reach $6000, while still recommending trimming positions as it rises.
• Dollar: He suggests the US dollar has 15-17% upside potential, offering a potential safe haven during market volatility.

VI. Technical Analysis & Key Levels

Vermuan utilizes Fibonacci retracements and extensions to identify key support and resistance levels.

• Silver: He highlights the 61.8% Fibonacci retracement level as a critical point. Breaking below this level would signal significant damage to the bullish outlook. He notes a potential bounce to $91-$97, where he would consider reducing his position.
• Gold: He believes gold has a stronger bullish bias and could continue to rise, potentially reaching $6000.

He also emphasizes the importance of observing the 50-day and 20-day moving averages as potential support levels.

VII. Layered Chart Analysis & Asset Revesting

Vermuan presents a layered chart comparing the performance of the S&P 500, gold, silver, Bitcoin, and the dollar index. He observes that during periods of market weakness, all assets tend to decline, highlighting the importance of asset revesting – shifting capital into assets that are likely to hold value or generate returns. He suggests that the dollar could offer a temporary safe haven during a broader market downturn.

VIII. Emotional Considerations & Long-Term Perspective

Vermuan acknowledges the emotional difficulty of selling precious metals after holding them for an extended period. However, he stresses the importance of avoiding emotional attachment to assets and being prepared to capitalize on future opportunities. He believes the “easy money” has been made in metals and anticipates a more significant buying opportunity after a correction.

IX. Resources & Further Information

Christopher Vermuan directs viewers to his website, technicaltraders.com, and his YouTube channel, The Technical Traders, for daily analysis and trading strategies.

X. Conclusion & Future Outlook

The discussion concludes with a cautious outlook for February, emphasizing the need for careful position management and a willingness to adapt to changing market conditions. The speakers anticipate an interesting month ahead and encourage viewers to stay informed through future content on the channel. The overall takeaway is that while precious metals have performed well, the recent corrections suggest a period of increased volatility and the need for a more strategic approach to investing.

Notable Quote:

“It’s about how do you manage it and identify it, not so much who’s who’s doing it.” – Christopher Vermuan, on the debate surrounding market manipulation.

“I think gold is actually just starting. It still might take weeks, but I think it’s going to eventually push higher and then people will all pile into gold and chase it and silver will kind of be left behind like we saw in 2011.” – Christopher Vermuan, on the potential divergence between gold and silver performance.