Why Something “Big and Bad” Will Happen (Why Gold Must Sell-Off First) - Chris Vermeulen

Happy Monday, everyone. Gold has been one of the most dramatic stories of 2026 after surging to all-time highs above 5,400 an ounce earlier this year. It has since fallen roughly 26% from its peak and recently cracked below the key 4,000 level. But we are getting a bounce back today and we need to figure out which direction we are moving in. So I am joined by Chris Vermeulen, founder and chief market strategist at TheTechnicalTraders.com. Chris, always good to be with you. Welcome back to the Danielle Caboni Show. Thanks for having me, Danielle. Appreciate it. Now, Chris, I know on recent interviews, you said that gold and silver have entered a bear market. And you were potentially even looking at deeper drops towards $3,100, which you say could set up epic buying. But first, let's talk about the movement today in gold. And is it going to change your longer-term thesis here? Yeah, I mean, we're definitely seeing some moves in gold to the downside. There's two different time frames, right? Either a long-term investor, I'm very bullish on precious metals. As a shorter-term trader looking to try to navigate the markets, gold, I'm fairly bearish. And I have a very, very straightforward methodology that tells us when we're in a bullish environment or a bearish environment. And general rule of thumb is if this green 150-day moving average is sloping up, price is above it, and the shorter-term moving averages are also above it, we're in a bullish environment. Now, when it rolls over and starts to slope down and price and the moving averages are below it, we're technically in a bear market. And so gold and silver have been in a bear market for quite a few months. We saw the traumatic kind of peak earlier this year, and gold is heading down. There's quite a bit of downside potential in the near term for gold. The targets are pointing roughly around $3,300 or so for gold. That's kind of a measured move, which we've seen in the past happen over and over again. So when I look at gold, this isn't, you know, as a long-term investor, if you buy gold as a insurance plan, obviously this doesn't really matter. This is more for somebody who's navigating it, wants to potentially sell at a higher level, reload after it has had a cycle low. So those are the downside, kind of the downside target for gold based on the price action. Wow. Okay. And then you see it as an epic buying opportunity. Like I would say even today, Chris, no? Well, it depends on the timeframe that you're looking at. When we look at gold, we are right back down to this $4,000 mark. This is where a lot of people previously back in June, July, were saying, hey, this gold's put in a bottom, they're buying it. This was a very strong move. A lot of people piled in and we actually saw gold at a very nice bounce. But during this bounce, I was talking about this is a bounce within a bear market. The moving average was low, prices are is making lower highs lower lows again this is still a lower high we had you know this is a series of lower highs a series of lower lows so you could argue right here at this 4000 mark this is a short-term support zone there's no doubt we're probably going to see it pause and have a bounce here but overall the underlying tide of gold continues to decline and it's generally going to pull things down until this cycle does bottom out and so i do believe we're going to see gold continue to move lower i think it's going to try to get back down to 3300 back down into this area before gold took off into this euphoric kind of frenzy you can see it in the volume you could feel it in the sentiment back during both of these breakouts and typically once you hit those euphoric phases where everyone is headline news all day every day and the general public are piling in. The market likes to try to get back to those levels. So anybody who chased it in those euphoric phases has to feel a little bit of pressure and potentially get stopped out and give up on it before it goes higher. We'll get right back to the interview, but this is an important moment to ask yourself when the next crisis hits, will you be properly positioned or wish you prepared earlier? I've spent over two decades reporting on global economic shifts and And what's happening now is unprecedented. In moments like this, timely decisions are critical. That's why we've put together the Private Wealth Playbook. It's actually a new revised version of it. It's a free guide showing you how to use gold and silver strategically for protection, privacy, and long-term performance. Click below or visit dannyreport.com to download it now so you can move forward with clarity and confidence. Now back to the show. i mean can you overlay or can you just pull up a chart on oil i mean do we need oil to come back down for gold to reload here i don't think so i i mean i think obviously higher energy prices puts a little bit of pressure on on the cost of gold but overall i i still think i think oil is doing its own thing i think we've got the the middle east issues there we've got uh high energy pricing is causing a little bit of a wrinkle. But overall, I think they're still fairly separate. I mean, they're their own things. I think higher energy pricing hurts miners more than anything else. But overall, when we look at what is going with oil, I think we're going to see oil continue to trade up at this $100 up to about $120 per barrel. It's going to keep inflation, I think, somewhat high. And we just need to expect higher pricing. But I don't think it's going to directly play too much into the price of gold, gold I think we're seeing it, we're seeing an unwinding event we're seeing just a lot of people giving up on it surprisingly that's why it's moving down there's more selling orders than there are buy orders and i think we're seeing potentially uh certain countries maybe having to sell some of their uh their gold reserves if they can't ship oil out they can't do that maybe they're unloading or uh precious metals and um it's just kind of what we're seeing in the chart what about the AI story though i mean what's your thesis there chris how much how much longer you know can it run here well the ai story i mean it's i i i've referenced it a few times i think it's similar to the tech bubble like similar but obviously different so obviously the internet was huge it has been huge but the internet bubble back in 2000 it was it was a bubble phase it wasn't really making money it wasn't doing a whole lot back then hence we saw the huge 70 to 80 percent correction in the nasdaq 100 but now technology the tech side the internet is is huge well ai is kind of similar we got this huge bubble we got massive spending everybody's been piling into it it's not really making any money it's just a lot of spending and hype is going into it that being said AI is is changing and and will become extremely i think profitable and very powerful down the road, but we're just in that early excitement phase. Investors have piled in. So I do believe we are in a bubble. I think AI is here to stay and it's going to be extremely profitable and powerful down the road. But I do feel like we are seeing things start to really slow down. We got about $10 trillion, I think, in earnings coming out from Amazon and a bunch of other big companies this week. So it's a huge week for AI space. Investors right now are are questioning the companies we're starting to see a lot of investors saying hey stop spending all the money on data centers and AI let's let's not just burn through all of these profits that we're making so investors are starting to get a little bit nervous and a little upset with the amount of money being spent on this and um and i i think we're going to see it unwind eventually but again the AI space is holding the whole economy up i think the united states economy i think it's holding the stock market up because the majority of stocks aren't trading at all-time highs the market is not that strong the stock market majority of stocks are not making all-time highs and um and and the tech space is doing a lot of the heavy lifting so eventually we're going to see a big unwinding event and that will probably pull precious metals down as well there'll be liquidity required meaning things have to get sold um as we're seeing you know record amounts of margin levels in trading accounts when when the margin spikes in the trading accounts and the stock market follows suit that means people are just borrowing money and then pushing it into the stock market so people are leveraged up and we're going to need an unwinding of this that's going to pull a lot of assets down i mean is that not terrifying though Chris to know that the economy is just propped up completely on this AI bet it is it's it's i mean it's one of the reasons why i actually just, I just wrote a book about after the rally, when all this comes to an end, because investors, I don't think understand the amount of risk they have. I think a lot of people don't understand, even though they're diversified across multiple assets, commodities, different stocks and sectors, you know, what most people do, how most people invest all unfolds and falls apart right when you need it to work the most. And so I, I mean, I believe we're going to have a very huge downturn in the financial system. I think it'll temporarily pull precious metals down with it because there'll be just margin calls, liquidity required, forcing people to sell pretty much all their assets or a lot of their assets. But precious metals should bottom first and it could bring us down to that level in gold, like $3,300, maybe even $3,100 for gold, which is going to be a golden opportunity for precious metal traders to be able to add to your pile if you're buying it for insurance or to get positioned at a major cycle low where you could hold precious metals for the next 10 15 years 20 years and do exceptionally well not only from a return on investment but you also get that that hedge that insurance that if the government collapses currencies collapse you've got the precious metals in place so but um i mean in a perfect world we see things unwind is it a selling Time now then for you. Yeah, we have, we've moved to cash recently so we were in the equities market we've moved to a cash position. Now we're just waiting to see which way the equities market wants to go. The S&P 500 and the NASDAQ I've been trading, really, well, the NASDAQ's been trading sideways since May. We're back at those levels. So it has been really choppy for a long time. And there is potential for another leg higher. We could see Anthropic go public. It might spark a bunch of excitement. And there's potential for the NASDAQ to actually pop and rally another you know 15 20 percent which if that happens i think it will be kind of the last euphoric kind of everybody piles in and who's not in and and then we see a major top happen kind of like what we saw in precious metals you just everybody just has to get in uh because it it's running higher without them it'll be ai driven and that'll be a topping sign and of course we just have to wait to see how we get there so i think we need to be very aware that something big and bad is likely to happen. And I've thought that for several years. The key is to continue to trade with the underlying trend. So we've been long equities for the last few years, even though I've been bearish, thinking we're going to have a correction. And that's the big difference, right? You have your opinions and analysis, but then you also have your positions and your positions have to be in line with the underlying trends. Just last point, Chris, I want to bring in because I'm sure you've seen the narratives. um you know my colleague Taylor Kenny has also covered this that this is just a trend of gold that there has to be some sort of you know deep drawdown before the next major run-up and that it's you know whether you believe it's purposely crafted or not i mean just any thoughts there yeah i mean the market loves to shake people out i mean that's what it is really good at i mean we're we're emotional creatures i mean that's how the the stock market is and and the price of every commodity, more or less, is the vibration of the accumulated investors who are focusing on it. Typically, the markets love to make sure they hit extremes, extreme points where we start to see investors give up on an opportunity. If the market, as they say, if it doesn't shake you out, it will shake you out, meaning we can see things go dormant for sometimes 5, 10, 15 years before they really start to make new highs again. And so I do think the market is going to try to apply maximum pain try to get people to give up on it i try to shake them out because the markets are very good at shaking out people who are using leverage people get greedy they use leverage and the market knows just how much to move to get you out before it turns around and takes off without you and the market i think is is slowly setting up for that and we do need that cleansing event as you mentioned what a beast all right uh Christopher Mull and i appreciate your thoughts this monday morning uh keeping it real for us i will see you soon okay yep thanks daniel take care and thank you all for watching we'll have more great content and we're here to help you set up that strategy uh to position yourself to to get in and be ready for the precious metals rally so reach out to my wonderful colleagues at ITM Trading um to set you up for success you want to be on the winning side of history here um we'll see you all soon take care