Wheaton Precious Metals Surges 4.9% on Record High—But Is the Rally Sustainable?

Summary
• Wheaton Precious Metals (WPM) hits 52-week high of $118.685, surging 4.9% intraday
• Analysts at RBC and Jefferies upgrade to Buy, targeting $130
• DCF analysis flags 34.6% overvaluation despite 86% YTD rally
• Hemlo Mine gold stream deal and strong Q3 earnings drive momentum
Wheaton Precious Metals (WPM) is trading at its highest level since October 2025, fueled by a combination of analyst upgrades, a new gold stream deal, and robust earnings. The stock’s 4.9% intraday gain reflects optimism in the gold sector amid Fed rate cuts and geopolitical tensions, though valuation metrics suggest caution for long-term investors.

Gold Stream Expansion and Analyst Upgrades Fuel WPM's Rally
WPM’s surge is driven by a confluence of factors: a new $300 million Hemlo Mine gold stream deal, which expands its long-term reserves, and a wave of analyst upgrades. RBC Capital and Jefferies both raised price targets to $130, citing strong Q3 earnings (C$367M net profit) and a 54.5% revenue increase. Meanwhile, the Fed’s 25-basis-point rate cut and dovish guidance have bolstered gold prices to $4,277/oz, directly benefiting royalty and streaming plays like WPM. However, a DCF analysis suggests the stock is 34.6% overvalued, highlighting a tug-of-war between near-term momentum and long-term fundamentals.

Gold Sector Rally Amplifies WPM's Gains as Gold.com Surges 1.6%
The broader gold sector is surging, with Gold.com (GOLD) up 1.6% intraday, reflecting renewed demand for safe-haven assets. WPM’s 4.9% gain outpaces the sector average, underscoring its role as a leveraged play on gold prices. The Fed’s liquidity measures and geopolitical tensions—such as Venezuela-related frictions—have amplified demand for gold, with central banks (notably China) adding to reserves. WPM’s streaming model, which benefits from rising gold prices without the operational risks of mining, positions it to outperform peers in a volatile market.

Options and Technicals: Navigating WPM's Bullish Momentum
• RSI: 64.12 (overbought threshold near 60)
• MACD: 2.09 (bullish), Signal Line: 1.53
• 200D MA: $92.08 (well below current price)
• Bollinger Bands: Price at $118.36, above upper band of $113.17
• Key Resistance: $107.14–$108.04 (200D support-turned-resistance)
• Key Support: $96.22–$96.59 (30D support)
WPM’s technicals suggest a continuation of its bullish trend, with RSI and MACD indicating strong momentum. The stock is trading above its 200-day moving average and Bollinger Bands, signaling extended volatility. For options traders, the WPM20251219C115 and WPM20251219C116 contracts stand out:
• WPM20251219C115 (Call, $115 strike, 12/19 expiry):
- IV: 39.36% (moderate)
- Leverage Ratio: 23.96%
- Delta: 0.696 (moderate sensitivity)
- Theta: -0.444 (high time decay)
- Gamma: 0.0478 (strong price sensitivity)
- Turnover: 34,767
- Payoff at 5% Upside ($124.28): $9.28/share
- Why it stands out: High gamma and leverage make it ideal for a short-term rally.
• WPM20251219C116 (Call, $116 strike, 12/19 expiry):
- IV: 24.97% (low)
- Leverage Ratio: 35.55%
- Delta: 0.712 (moderate sensitivity)
- Theta: -0.405 (high time decay)
- Gamma: 0.0735 (very strong price sensitivity)
- Turnover: 53,947
- Payoff at 5% Upside ($124.28): $8.28/share
- Why it stands out: High liquidity and gamma make it a top pick for aggressive bulls. Aggressive bulls may consider WPM20251219C116 into a break above $116.50, while conservative traders could target WPM20251219C115 for a safer entry.

Backtest Wheaton Precious Stock Performance
The backtest of WPM's performance after an intraday surge of at least 5% from 2022 to the present shows favorable results. The 3-Day win rate is 55.05%, the 10-Day win rate is 57.23%, and the 30-Day win rate is 62.77%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 6.32%, which occurred on day 57, suggesting that WPM can deliver decent gains following a 5% intraday surge.

Bullish Momentum Intact—But Valuation Risks Loom
WPM’s 4.9% surge reflects strong technicals and sector tailwinds, but its 34.6% overvaluation per DCF analysis raises red flags for long-term investors. The stock’s rally hinges on gold prices staying above $4,200/oz and the Fed maintaining dovish policy. Watch for a breakdown below $107.14 (200D support-turned-resistance) or a breakout above $118.685 (52-week high). Gold.com’s 1.6% gain reinforces sector strength, but traders should balance optimism with caution on valuation. Action: Target WPM20251219C116 for a 5% upside play, but exit if $116.50 fails to hold.