Steve Barton: Key Silver Price Level is US$92, Watch Friday's Close

Precious Metals, Oil, Copper & Nickel: A Technical Analysis with Steve Barton

Key Concepts:

• 200-day Moving Average: A key technical indicator used to identify long-term trends and potential support/resistance levels.
• Bull Flag: A chart pattern suggesting continued upward momentum after a consolidation period.
• Bear Flag: A chart pattern suggesting continued downward momentum after a consolidation period.
• RSI (Relative Strength Index): A momentum oscillator used to identify overbought or oversold conditions.
• Fibonacci Retracements: A tool used to identify potential support and resistance levels based on Fibonacci ratios.
• Sulfide vs. Lateritic Nickel: Different types of nickel deposits, with sulfide deposits generally considered more economically viable and environmentally friendly.
• Ratio Trading (Gold/Silver): Exploiting discrepancies in the price ratio between two assets to generate profit.
• Joint Venture: An agreement between two or more parties to collaborate on a project, typically sharing resources and risks.

I. Gold Market Analysis

Steve Barton assesses the gold market as being at a pivotal point, around the $5,200 level. His analysis, based on historical price action, suggests three potential scenarios over the next month:

• 10% Probability: A decline to touch the 200-day moving average.
• 40% Probability: Continued trading within the $4,600 - $5,200 range.
• 50% Probability: A breakout above $5,200, potentially facing resistance around the all-time high of $5,600.

He notes a recent shift towards a more bullish outlook, contingent on a weekly close above $5,200. Barton emphasizes that even during a bull market, corrections often test the 200-day moving average, but believes the current correction may not reach that level. He states, “every single bull market during the bull market sometime and sometimes multiple times it comes down and it touches this blue line, the 200 day moving average.”

II. Silver Market Analysis

Silver’s technical picture is viewed as less favorable than gold’s. Barton assigns the following probabilities for the next month:

• 10% Probability: A decline to touch the 200-day moving average.
• 20% Probability: Trading between $54 and $70.
• 50% Probability: Failure to break above $92, with potential rejection and a move downwards.

He highlights bearish signals, including a downward sloping 20-day moving average compared to gold’s positive trend. Barton believes a break above $92 is unlikely, stating, “I'm more bearish on silver than I am for gold. I think we're going to hit that $92 level and I don't think we're going to close the week above it.” He describes the current pattern as a “bear flag,” with a 70% probability of downside movement. He anticipates a potentially prolonged period of sideways movement or decline, possibly lasting months, due to significant technical damage from a recent single-day drop comparable to the 1980 Hunt Brothers silver crash.

III. Trading Strategy During the Recent Metals Volatility

Barton details his strategy during the recent gold and silver price surge and subsequent correction:

• Profit Taking: He secured profits on physical gold (PSLV) and silver holdings.
• Ratio Trading: He exploited the gold/silver ratio, trading silver for gold when the ratio reached 45:1 (1 ounce of gold for 45 ounces of silver), recognizing silver as undervalued. He notes the ratio previously reached 100:1.
• Diversification: Profits were reinvested into oil and gold/silver mining stocks.
• Mining Stock Exposure: He took positions in gold and silver miners (SILJ), including call options, with plans to trim positions near resistance levels. He specifically mentions potentially selling remaining SILJ leaps around $41.

IV. Oil Market Outlook

Barton is cautiously optimistic about oil, noting the potential for a move towards $69-$70 per barrel (WTI) due to a breakout above the 200-day moving average. Brent crude has already broken out. However, he acknowledges geopolitical risks, particularly concerning Iran and the potential disruption of oil flows through the Strait of Hormuz, but believes any disruption would likely be short-lived.

He suggests a potential opportunity to profit from overvalued oil stocks, specifically mentioning ExxonMobil (XOM) exhibiting a “topping tail” pattern, indicating a potential downward correction. He states, “I don’t think anyone should be buying oil stocks right here. I think we should have been buying them back here last time we were talking.” He is hesitant to take a short position on oil stocks due to the Iranian geopolitical situation. His long-term outlook for oil is around $85-$90 per barrel.

V. Copper and the 2026 Prediction

Barton has revised his outlook on copper, becoming less bullish in the short term. While maintaining a long-term positive view, he observes a sideways to downward trend and a break of a key trend line. He identifies a potential buying opportunity around $5.00 (near the 200-day moving average) and $4.60 (a longer-term trend line).

VI. Nickel as the Top Pick for 2026

Barton identifies nickel as his new top-performing asset pick for 2026, driven by a fundamental shift in the market. Key factors include:

• Indonesian Export Restrictions: Indonesia, responsible for 60-65% of global nickel supply, is reducing exports and increasing environmental standards.
• Sulfide Nickel Demand: A preference for sulfide nickel deposits (higher grade, more environmentally friendly) over lateritic nickel deposits (Indonesia’s primary source).
• Undervaluation: The nickel price has been suppressed by the surplus of Indonesian lateritic nickel.

He recommends focusing on sulfide nickel deposits outside of Indonesia, particularly in Brazil and Canada. He highlights Nation’s Royalty (NRO.V) as a high-leverage play, a small royalty company with a royalty on the KSM deposit (Seabridge Gold’s project), potentially offering a 5-6x return if a joint venture with Newmont is finalized. He cautions about the limited float of the stock and the potential for volatile price swings.

VII. Company Specific Opportunities

• Seabridge Gold (SA): Barton believes a joint venture on their KSM deposit with Newmont could double the stock price.
• Nation’s Royalty (NRO.V): A high-risk, high-reward play tied to the KSM deposit, potentially offering significant gains if the joint venture materializes.

Conclusion:

Barton’s analysis presents a nuanced view of the precious and energy markets. While maintaining a bullish outlook on gold and long-term copper, he expresses caution regarding silver and oil stocks. His identification of nickel as a potential outperformer for 2026, driven by supply-side dynamics and environmental factors, offers a compelling investment thesis. He emphasizes the importance of technical analysis, risk management, and adapting strategies based on evolving market conditions. He also promotes his technical analysis course as a tool for investors to develop a repeatable and confident trading system.