(Kitco News) - Gold and silver prices may be treading water this summer, but Florian Grummes says the bigger breakout is coming - and patient investors will be rewarded.
“We’re in a crack-up boom overall,” said Grummes, managing director of Midas Touch Consulting, in an interview with Kitco News. “That means everything will move higher because they destroy the purchasing power of your fiat money - whether it’s the euro, the dollar, or the Canadian dollar.”
Gold is holding around $3,320 an ounce Tuesday, after dropping over $130 in four sessions last week. Grummes said that’s part of a typical summer pattern.
“It’s trading sideways. It’s consolidating. It’s digesting,” he said. “It just takes time. People need to be patient.”
Back in April, Grummes said gold wouldn’t drop below $3,000 - and that call still stands. “We’ve probably seen a short-term blow-off top,” he said, referring to gold’s high at $3,500. “We’ve seen a low at $3,120. It recovered quickly and failed to break through $3,450 now four times.”
He sees support at $3,285 and resistance at $3,450, with a long-term upside target of $4,000. “Over the rest of the year, I think we can see $4,000 plus, definitely,” Grummes said.
Grummes’ short-term bias flips bullish above $3,365. “Until then, it’s kind of a sideways to down bias,” he said. “But this is not a big downside.”
$50 Silver Still on the Table
Grummes maintains his bold silver target from April, calling for a move to $50 in the second half of 2025. “Silver is up 23% since we spoke in April,” he said. “The move has been slower than anticipated, but it’s bullish. It’s playing out step-by-step.”
He points to creeping price action, thin volume, and a lack of speculative froth as signs of strength. “It’s the physical market dominating prices,” he said. “It’s slowly but surely - the physical demand is forcing prices higher.”
He cited a bias level at $37.50 and dismissed concerns of a failed breakout. “Even if it pulls back a little bit further, I’m not worried at all,” Grummes said. “Compared to gold, silver is still very cheap. If you want to invest in the metal - you need to buy silver.”
Miners: Juniors Are Where the Music Will Be
Silver mining stocks have outperformed, and Grummes singled out one small-cap winner. “Silver Tiger Metals in Mexico - the stock is up 125% since we talked three months ago,” he said. “All they need is the permit. It takes 18 months and they’re in production.”
He pointed to a resurgence of M&A activity in Mexico, citing SilverCrest’s $1.7 billion acquisition by Coeur, Gatos’ takeover by First Majestic, and MAG Silver’s acquisition by Pan American Silver.
“Mexico is back on the radar,” he said. “The big producers clearly trust the new government - otherwise they wouldn’t invest these huge amounts of money.”
Asked whether large-cap or small-cap miners look more attractive now, Grummes leaned toward the juniors. “The big names - many have done well, some have disappointed,” he said. “Now it’s time to really focus on the smaller juniors and also the explorers.”
He believes gold’s next leg higher will light a fire under that segment. “Once gold breaks above $3,500 and runs towards $4,000 and probably much higher, you’re going to see some of those smaller stocks really exploding.”
Bitcoin: Summer Slowdown, But $150K Still in Sight
Bitcoin’s consolidation near $117,000 doesn’t bother Grummes, who sees higher highs coming in Q4.
“Yes, we made a new all-time high at $123,000,” he said. “It’s consolidating that move. Maybe it takes a few weeks. I still think 125 to 130,000 will be met - most likely even $150,000 by the end of the year.”
However, he warned of growing leverage risk in the crypto space.
“All these copycats of Mr. Saylor and all these treasury companies - they’re not really buying the coins,” he said. “It’s all financed on debt. I’m very skeptical in the longer run for crypto. But until the end of the year - I’m still very bullish.”
He also noted Ethereum’s recent surge and declining Bitcoin dominance as signs the cycle may be nearing a peak.
Macro: “It’s the Market That Tells the Fed What to Do”
With the Fed widely expected to hold rates steady on Wednesday, Grummes said the real story is the global debt burden and market pressure.
“There is inflationary pressure. We have the war cycle going on. Trump wants to get rid of Powell - but he’s still running the show,” Grummes said.
“At the end of the day, it’s the market who makes these decisions. Investors demand higher interest rates. And America still has problems finding enough buyers for their Treasuries.”
His advice to retail investors right now: “Don’t chase it in these summer doldrums. Let the trade come to you,” he said. “You don’t have to be fully invested here.”
Grummes’ full interview covers the gold breakout timeline, miners to watch, Bitcoin cycle risks, and why patience beats FOMO this summer. Watch the full conversation on Kitco News and subscribe for more in-depth market analysis.