Veteran market strategist Chris Vermeulen warns that gold and silver may be closer to a major top than most investors realize, with a potential drawdown of 30% to 60% mirroring the 2008, 2020 and 2022 crashes.
Silver in a 'Feeding Frenzy', Gold Could Push Above $5,000
Speaking on The David Lin Report, Vermeulen — chief market strategist at thetechnicaltraders.com — said precious metals are exhibiting classic late-cycle behavior: surging momentum, crowded positioning and rising euphoria. Silver recently blasted through the $100 psychological level and could run to $120-$140 before exhausting. Gold, while slower, may decisively clear $5,000 per ounce in the near term as capital rotates out of weakening equities. As of Jan. 28, 2026, gold hit $5,315 and silver nearly touched $120 on Jan. 26.
Sharp Reversal Ahead: 30%-60% Correction Seen
Vermeulen cautioned that these final upward moves often precede violent reversals. He compared the current setup to 2008, 2020 and 2022, when metals initially benefited from equity selloffs but then crashed as fear, margin calls and forced liquidation took over. In past cycles, gold lost over 30%, while silver and platinum plunged more than 60%.
Mining Stocks, Leveraged ETPs Flash Top Signals
He pointed to mining stocks tripling in a year and the emergence of leveraged mining exchange-traded products as late-cycle warnings historically tied to tops. On AI-linked stocks — especially the 'Magnificent Seven' — Vermeulen sees topping patterns forming after massive inflows. Financing for data centers is tightening and AI momentum is cooling.
Raising Cash, Exiting Tech: Defensive Mode Activated
Vermeulen said his firm has shifted into defensive mode, raising cash to roughly 30% of portfolios and exiting tech-heavy positions like the Nasdaq-tracking QQQ. He stressed this is a recent move and not a long-term bearish stance, as his strategy follows trends rather than predicting tops.
Yields Could Hit 8.3%
On interest rates, Vermeulen flagged technical signals that the U.S. 10-year Treasury yield could eventually climb toward a massive 8.3%, straining government debt and global bond markets. He called it an outcome not guaranteed but echoed by chart-based structural stress.
Bitcoin Riskier Than Gold: Sentiment-Driven Slumps
On bitcoin, Vermeulen was cautious. He said BTC is vulnerable to sharp downsides if equities weaken, given its mass-psychology dynamics — often leading to swift selloffs once momentum turns. When asked to choose between gold and bitcoin in 2026, he favored gold for its lower volatility and established role in financial uncertainty, though he remains long-term bullish on gold beyond current levels.
Vermeulen does not believe the metals rally is fully over. Instead, he urged investors to scale out gradually rather than attempt to time an exact top. “At some point,” he said, “you just have to be happy with the gain.”