Precious metals still have something to prove: strategist

AI desk brief

Chris Vermeulen of The Technical Traders says the recent rally in gold, silver and mining stocks may be overdone, arguing the big chart patterns still show lower highs and lower lows and therefore have not confirmed a durable uptrend. He warned the miners may pull back and that precious metals could go dormant for years if momentum does not improve, despite what he calls the strongest fundamental backdrop in the sector.

He also pointed to fear in the bond market and elevated yields as reasons precious metals have come back into favor, with investors seeking alternatives to the dollar. Overall, his message is that the fundamental case is constructive, but the technical setup remains unconvincing and leaves room for a correction.