{"id":39475,"date":"2026-10-26T11:59:11","date_gmt":"2026-10-26T18:59:11","guid":{"rendered":"https:\/\/www.itmtrading.com\/blog\/?p=39475"},"modified":"2026-10-26T11:59:11","modified_gmt":"2026-10-26T18:59:11","slug":"gold-sell-off-stock-market-crash-warning","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/gold-sell-off-stock-market-crash-warning\/","title":{"rendered":"Why Something \u201cBig and Bad\u201d Will Happen (Why Gold Must Sell-Off First) – Chris Vermeulen"},"content":{"rendered":"
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Gold has already suffered a brutal sell-off. But according to market strategist Chris Vermeulen, the most dangerous phase may still be ahead\u2014and the next major financial crisis could send precious metals even lower before setting the stage for a historic buying opportunity.<\/strong><\/p>\n

After surging above $5,400 per ounce earlier in 2026, gold has fallen approximately 26% from its peak, recently slipping below the psychologically important $4,000 level. While some investors see the correction as an opportunity, Vermeulen believes the market may have considerably more downside to work through.<\/p>\n

In a conversation with Daniela Cambone, the founder and chief market strategist of The Technical Traders warned that gold could eventually fall toward $3,300\u2014or even $3,100\u2014as an overleveraged financial system faces a potentially severe unwinding.<\/p>\n

His warning goes beyond precious metals. Vermeulen believes the artificial intelligence investment boom, excessive market leverage, and weakening stock market participation could combine to trigger a much broader downturn.<\/p>\n

And when that happens, even traditional safe-haven assets may not escape the initial selling pressure.<\/p>\n

Gold Sell-Off: Why the $4,000 Level May Not Hold<\/h2>\n

Gold’s recent rebound above $4,000 has offered some relief, but Vermeulen cautions that a temporary recovery does not necessarily signal a lasting bottom.<\/p>\n

His technical analysis points to a bearish trend that has developed over several months.<\/p>\n

Vermeulen focuses on the 150-day moving average to distinguish bullish environments from bearish ones. When prices remain above a rising moving average, the broader trend is generally constructive. When prices and shorter-term moving averages fall below a declining 150-day average, the technical outlook deteriorates.<\/p>\n

According to his analysis, both gold and silver have entered bearish market conditions.<\/p>\n

The critical levels he is watching include:<\/p>\n

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  • $4,000 per ounce:<\/strong> A potential short-term support zone where gold could experience temporary rebounds.<\/li>\n
  • $3,300 per ounce:<\/strong> His primary downside target based on historical price patterns and the current market structure.<\/li>\n
  • $3,100 per ounce:<\/strong> A deeper potential decline if broader financial-market liquidation accelerates.<\/li>\n<\/ul>\n

    From approximately $4,000, a decline to $3,300 would represent another 17.5% loss. A move to $3,100 would mean roughly 22.5% additional downside.<\/p>\n

    These are technical projections, not guaranteed outcomes.<\/p>\n

    Vermeulen argues that the explosive rally in precious metals created a euphoric environment in which investors rushed to participate, often without considering the potential consequences of a reversal.<\/p>\n

    Once that enthusiasm fades, prices can retreat toward earlier breakout levels as speculative positions unwind.<\/p>\n

    The unsettling possibility is that gold’s current weakness is not the end of the correction, but part of the process of eliminating excessive speculation before a more durable recovery begins.<\/strong><\/p>\n

    The AI Bubble Could Trigger the Next Stock Market Crash<\/h2>\n

    Gold’s decline is only one piece of the much larger financial risk Vermeulen sees developing.<\/p>\n

    His central concern is the enormous amount of capital concentrated in artificial intelligence and technology-related investments.<\/p>\n

    He compares the current enthusiasm around AI to the internet bubble of the late 1990s.<\/p>\n

    The internet ultimately transformed the global economy, but that did not prevent technology stocks from suffering devastating losses when speculative valuations collapsed.<\/p>\n

    The Nasdaq-100 experienced a drawdown of roughly 80% during the dot-com bust.<\/p>\n

    Vermeulen sees a similar distinction developing today: AI may ultimately become a powerful and profitable technology, but that does not mean investors are paying sustainable prices for its future growth.<\/p>\n

    He points to several warning signs:<\/p>\n

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    • Enormous AI infrastructure spending:<\/strong> Major technology companies are directing substantial capital toward data centers and AI development.<\/li>\n
    • Questions about profitability:<\/strong> Investors are increasingly scrutinizing whether AI-related revenue will justify the scale of spending.<\/li>\n
    • Narrow market leadership:<\/strong> Vermeulen argues that technology stocks are carrying a disproportionate share of the broader market’s performance.<\/li>\n
    • Increasing leverage:<\/strong> Borrowed money could amplify selling pressure when market conditions deteriorate.<\/li>\n<\/ul>\n

      The danger is not necessarily that artificial intelligence fails.<\/p>\n

      The danger is that AI succeeds over the long term while investors suffer severe losses in the short term because expectations became detached from financial reality.<\/strong><\/p>\n

      And if heavily weighted technology companies begin falling together, the consequences could extend far beyond the Nasdaq.<\/p>\n

      Margin Calls: Why a Stock Market Crash Could Drag Gold and Silver Down<\/h2>\n

      One of Vermeulen’s most important warnings concerns what happens when an overleveraged market finally breaks.<\/p>\n

      Investors often assume that gold will automatically rise when stocks collapse.<\/p>\n

      Historically, however, the relationship is not always that simple.<\/p>\n

      During severe liquidity crises, investors may sell assets they would otherwise prefer to keep because they urgently need cash.<\/p>\n

      This process can unfold rapidly.<\/p>\n

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      1. Stock prices begin falling.<\/strong> Investors with leveraged positions experience mounting losses.<\/li>\n
      2. Margin calls increase.<\/strong> Brokers demand additional collateral or the repayment of borrowed funds.<\/li>\n
      3. Investors liquidate other holdings.<\/strong> Gold, silver, and other assets may be sold to raise cash.<\/li>\n
      4. Selling pressure spreads.<\/strong> Falling prices trigger additional losses and further forced liquidation.<\/li>\n
      5. Prices eventually stabilize.<\/strong> Assets with stronger long-term fundamentals may recover once the liquidity pressure subsides.<\/li>\n<\/ol>\n

        A similar dynamic unfolded during the 2008 global financial crisis, when gold initially declined during periods of intense market stress before recovering strongly in subsequent years.<\/p>\n

        Vermeulen believes another major liquidation event could temporarily push precious metals lower alongside equities.<\/p>\n

        He also expects precious metals could establish their cycle bottoms before the broader financial markets complete their decline.<\/p>\n

        That sequencing matters.<\/p>\n

        Gold could experience its greatest short-term selling pressure precisely when financial-system risks are becoming most severe.<\/strong><\/p>\n

        For investors holding physical gold as long-term financial insurance, this raises an important distinction: short-term market prices and long-term wealth preservation are not the same objective.<\/p>\n

        Why Vermeulen Has Moved to Cash Despite the Possibility of Another Rally<\/h2>\n

        Despite his warnings about a major downturn, Vermeulen is not claiming that stocks must collapse immediately.<\/p>\n

        He explained that his trading strategy has recently shifted from equities into cash while he evaluates the next market direction.<\/p>\n

        The Nasdaq has experienced an extended period of sideways and volatile trading, but another powerful advance remains possible.<\/p>\n

        Vermeulen suggested that a new wave of AI enthusiasm, potentially including a major technology IPO, could drive the Nasdaq another 15% to 20% higher.<\/p>\n

        Rather than viewing such a rally as evidence that financial risks have disappeared, he believes it could represent a final euphoric phase before a major market reversal.<\/p>\n

        That is an important warning for investors who interpret rising prices as proof of financial stability.<\/p>\n

        A late-stage market rally can attract additional speculative capital, particularly from investors afraid of missing out.<\/p>\n

        But stronger prices do not necessarily mean underlying risks have improved.<\/p>\n

        Vermeulen’s approach distinguishes between what he believes may eventually happen and what prevailing market trends currently justify.<\/p>\n

        For retirement investors, the lesson is straightforward: a financial plan built entirely around the assumption that markets will continue rising may be exposed to risks that only become visible during a severe downturn.<\/strong><\/p>\n

        Oil Near $100\u2013$120 Could Add Another Inflation Threat<\/h2>\n

        Financial-market leverage is not the only concern.<\/p>\n

        Vermeulen also expects elevated energy prices to remain a source of economic pressure.<\/p>\n

        In the interview, he projected oil could trade between approximately $100 and $120 per barrel, partly reflecting ongoing geopolitical tensions in the Middle East.<\/p>\n

        Higher oil prices can affect consumers and businesses throughout the economy:<\/p>\n