Wheaton Precious Plummets 5.15% Amid Gold Volatility and Analyst Divergence – What’s Next?

Summary
• WPM trades at $117.82, down 5.15% from its 52-week high of $124.30
• Intraday range of $117.4–$120.44 highlights sharp correction
• Analyst upgrades clash with profit-taking in gold’s record-breaking rally

Wheaton Precious Metals (WPM) faces a dramatic intraday selloff, trading 5.15% below its previous close amid a broader pullback in gold prices. The stock’s sharp decline follows a record high of $124.30 and a surge in gold’s safe-haven appeal earlier this week. With geopolitical optimism tempering demand for precious metals and analysts raising conflicting price targets, traders are now scrutinizing key support levels and options strategies to navigate the volatility.

Gold’s Safe-Haven Rally Falters as Profit-Taking and Geopolitical Optimism Collide
WPM’s 5.15% intraday drop mirrors a broader correction in gold prices, which fell below $4,490 per ounce after hitting a record high of $4,530. The pullback follows profit-taking by investors who had aggressively bought gold amid geopolitical tensions and expectations of Federal Reserve rate cuts. Recent progress in U.S.-Ukraine peace talks—announced by President Trump and President Zelenskyy—has reduced demand for gold as a safe-haven asset. Meanwhile, ongoing tensions in the Middle East and U.S.-Venezuela frictions continue to support long-term bullish sentiment, creating a tug-of-war between short-term profit-taking and macro-driven demand.

Gold Sector Volatility Intensifies as WPM Trails Behind NEM’s 5.99% Drop
WPM’s 5.15% decline aligns with broader weakness in the gold sector, where Newmont (NEM) fell 5.998% and Franco-Nevada (FNV) dropped 4.88%. The sector’s mixed performance reflects divergent responses to gold’s correction. While WPM’s streaming model ties its fortunes closely to gold prices, NEM’s diversified mining operations face additional pressure from operational costs and regulatory risks in key markets like Brazil and Peru. Traders are now comparing WPM’s technical resilience to sector peers, with Bollinger Bands and RSI indicators suggesting potential rebounds for stocks with stronger liquidity profiles.

Options Playbook: Capitalizing on WPM’s Volatility with Strategic Leverage
• RSI: 76.52 (overbought)
• MACD: 4.77 (bullish divergence)
• Bollinger Bands: Upper $126.00, Middle $114.31, Lower $102.62
• 200-day MA: $94.77 (far below current price)

WPM’s technical profile suggests a short-term bearish bias despite long-term bullish fundamentals. Key support levels at $117.4 and $114.31 are critical for near-term stability. The stock’s high implied volatility (IV) and leverage ratios in options contracts offer strategic entry points for directional bets. Two top options from the provided chain stand out:

• WPM20260102C110: Call option with 14.55% leverage, 39.53% IV, delta 0.937, theta -0.798, gamma 0.0226. This contract offers high leverage for a modest price move above $110, with strong gamma amplifying gains if WPM rebounds.
• WPM20260102C116: Call option with 42.56% leverage, 29.48% IV, delta 0.691, theta -0.709, gamma 0.0865. This contract balances moderate IV with high gamma, ideal for capitalizing on a breakout above $116.50.

Payoff analysis under a 5% downside scenario (targeting $112.00) shows the WPM20260102C110 would yield a 37.5% return if WPM stabilizes near $110, while the WPM20260102C116 would break even. Aggressive bulls may consider WPM20260102C116 into a bounce above $116.50, while cautious traders should monitor the $114.31 support level for a potential reversal.

Backtest Wheaton Precious Stock Performance
The backtest of WPM's performance after a -5% intraday plunge from 2022 to now shows favorable results, with win rates and returns indicating the strategy's resilience and potential for positive outcomes:

Bullish Breakout or Bearish Breakdown? WPM’s $120 Support Test Looms
WPM’s 5.15% drop underscores the fragility of its recent rally, with gold’s correction and geopolitical optimism creating a volatile backdrop. While the stock’s long-term fundamentals remain intact—bolstered by a 12.12% five-year revenue growth and a debt-free balance sheet—short-term traders must navigate key technical levels. The $120.00 resistance and $114.31 support are critical for near-term direction. Sector leader Newmont (NEM) fell 5.998%, signaling broader sector weakness. Investors should watch for a breakdown below $114.31, which could trigger a deeper correction, or a rebound above $120.00 to rekindle bullish momentum. For now, the options market favors strategic leverage in call options with high gamma, positioning traders to capitalize on either outcome.