Samco Securities: Gold and silver bull forecaster spots strong upswing in crude oil

Brokerage Samco Securities, which earlier called the massive bull run in gold and silver, now believes the next big move could come from the global oil benchmark, arguing that the "energy phase" of the commodity supercycle is beginning to unfold.

Apurva Sheth, Head of Market Perspectives and Research at Samco Securities, said the recent recovery in WTI crude from the $55 zone is technically and structurally significant. In a note, he said the commodity has formed a bullish higher high and higher low structure and is pushing towards the $66 mark, with key support seen around $62 to $63 and a deeper base near $59.

"The relative strength index remains above 50, indicating positive momentum despite short-term volatility. Crude's current setup resembles a flag consolidation below a falling trendline. A decisive breakout above $66, he believes, could open the path towards $72 to $73 in the near term," he said.


"Leadership rotates in a sequence," Sheth said. Gold typically moves first as liquidity expands and real rates peak. Silver and base metals follow as growth expectations improve. Energy generally joins later, when industrial momentum strengthens and inflationary pressures broaden.

In the current cycle, gold has already delivered a powerful rally and silver has played catch-up. Now, Sheth sees crude beginning to align with that rotation.

While geopolitical tensions, particularly US-Iran developments, have contributed to the recent spike in prices, Sheth believes structural factors are building a more durable case. He pointed to the slowing US shale revolution, years of underinvestment in production capacity, and a potential surge in demand from countries such as China rebuilding strategic reserves as long-term tailwinds.

These supply-demand dynamics, combined with tightening technical structures, form the core of his bullish thesis.
On the gold and silver rally in the future, Sheth, in an interaction with ETMarkets, highlighted that the gold to silver ratio had fallen sharply after touching a support zone around 65 over the past decade, indicating that silver had been undervalued relative to gold.

As silver outperformed over the past six months, he now sees a possible role reversal, with gold regaining leadership while silver consolidates.

On gold, Sheth has maintained long-term Fibonacci projection targets drawn from the September 2011 peak to the December 2015 bottom. He reiterated extension levels of $2,608, $3,335 and $4,750, with a longer-term three-year target of $7,040. In such a scenario, silver could trade between $140 and $210 during the same period, based on historical bull run relationships where silver typically trades at 2 to 3% of gold’s price.