Gold & Silver Are Starting to Break Out

Although warm and sunny weather often lingers well into September here on Long Island, in the financial world Labor Day marks the end of summer. This year the holiday falls on Monday, September 1st. As a lifelong summer and beach lover, I always feel a twinge of sadness at this point in the season, but this time it’s balanced by growing excitement about what lies ahead for precious metals this fall—a scenario I’ve been anticipating and writing about for much of the past three months.

Specifically, I expect a bullish breakout from their summer doldrums that should fuel a strong rally into year-end. Friday’s price action in gold and silver has begun to confirm these expectations, though I believe we’re still in the early stages of the breakout and will need a bit more confirmation. With that in mind, let’s take a closer look at where gold, silver, and the mining stocks currently stand.

Let’s begin with COMEX gold futures to assess where gold stands technically. Momentum began building on Wednesday when gold broke out of a key triangle pattern (drawn using the light blue lines) that had been forming since April. It followed up with another bullish confirmation on Friday by finally closing above the critical $3,500 resistance level, which marked the upper boundary of the Summer 2025 trading range I’ve been consistently discussing.

These two breakouts within the past week are very encouraging and indicate that a strong year-end rally is likely underway. However, one important detail to note is that trading volume during both breakouts was relatively weak. Ideally, I like to see a surge in volume to confirm that a move is legitimate and backed by institutional or “smart money” participation.

That said, the lackluster volume may be explained by timing. Friday's rally occurred ahead of Labor Day weekend, when U.S. trading desks are thinly staffed, and both Asian and European markets had already closed. For that reason, I’ll be closely watching next week’s action to see if there is strong follow-through in both price and volume when Wall Street returns to full strength on Tuesday.

To learn more about what I expect to happen assuming gold’s breakout is fully confirmed, be sure to read my three recent articles:

Next, let’s examine the spot price of gold in U.S. dollars. Much like COMEX gold futures, spot gold broke out of its Summer 2025 triangle on Friday, which is an encouraging technical development. I’m now watching for a decisive move above the $3,500 resistance level, which marked the April peak, to provide further confirmation. Breakouts from horizontal support and resistance levels tend to carry more significance than those from diagonal levels. This additional confirmation will help ensure that we are seeing the start of a sustained rally rather than a false breakout.

I also monitor gold priced in euros, as it removes the effects of U.S. dollar fluctuations and often gives a clearer picture of how gold is performing in its own right. This past summer, gold in euros has been trading in a range between €2,700 and €3,000. I’m watching for a breakout above the €3,000 level as a signal that the rally is ready to gain momentum.

Gold priced in euros rallied nicely last week, but it has not yet broken through that key level. I’m continuing to watch closely, because a breakout could still occur after Labor Day and would indicate that gold’s bull market is starting to fire on all cylinders.

I’ve recently begun tracking gold priced in the World Currency Unit (WCU)—a composite currency based on the GDP-weighted average of the world’s 20 largest economies. In many ways, it offers one of the most balanced and accurate reflections of gold’s true global performance, which is why I’ve been paying close attention to it.

Since its April peak, gold priced in WCU (World Currency Units) has been consolidating within a trading range between 2,400 and 2,600. It strengthened nicely last week and is now approaching a breakout above the key 2,600 resistance level. I’m watching closely for that breakout, as it would signal that the next leg of gold’s bull market has truly begun.

Next, let’s turn to silver, starting with COMEX silver futures, which surged 2.57% on Friday to reach a fresh 14-year high. Last week’s strong price action pushed silver above both the triangle pattern that had been forming during July and August, as well as the key $40 resistance level that marked the late July high.

These are all very encouraging technical developments. However, similar to gold, the breakout occurred on lower-than-ideal trading volume. That may be due to Friday falling just before the Labor Day holiday weekend, when market participation is typically lighter. I’ll be watching closely next week for strong follow-through in both price and volume to confirm the breakout.

Next, let’s take a look at the spot price of silver in U.S. dollars. Similar to COMEX silver futures, the spot price broke out of the July–August triangle pattern, which is a very encouraging sign. For further confirmation, I’m now watching for a decisive close above the $40 resistance level. This is a key psychological ceiling and also the area where the rally temporarily stalled in late July.

I also monitor silver priced in euros to remove the effects of U.S. dollar fluctuations and get a clearer view of the metal’s intrinsic strength. This chart is showing very positive signs, including a breakout from the July–August triangle pattern and a move to the highest level since spring 2011. For further confirmation, I’m looking for a decisive close above the €34 resistance level, which is near the point where the rally temporarily stalled in late July.

Junior gold miners, as represented by the VanEck Junior Gold Miners ETF (GDXJ), have also broken out of an ascending triangle pattern, adding further confirmation that a major bull market in gold mining stocks is just getting underway.

In addition to being bullish on gold mining stocks, I am also very optimistic about silver mining stocks and will be publishing a detailed report on them soon. The monthly chart of the Global X Silver Miners ETF (SIL) shows a decisive breakout above the critical $48 to $52 resistance zone that has capped gains since 2016, which I view as a major bullish signal.

Junior silver mining stocks, which had been lagging until recently, are now waking up in a big way, and I am very bullish on their outlook. The most popular junior silver mining ETF, trading under the symbol SILJ, has now officially broken out of a long-term triangle pattern that dates all the way back to 2013.

Now that this decisive breakout has occurred, I expect explosive upside potential, particularly since junior mining stocks are highly leveraged to the price of the underlying metals and often outperform during broad precious metals bull markets.

To summarize, last week’s action in gold, silver, and mining stocks was extremely encouraging and aligns closely with what I’ve been expecting as summer winds down, fall begins, and Wall Street returns along with stronger trading volume. While volume has remained somewhat light, I’ll be watching closely for continued follow-through starting on Tuesday after Labor Day. There are still a few key price levels I’d like to see cleared for further confirmation, as I outlined earlier, but overall I’m very pleased with how things are developing so far. I’ll keep you posted as this breakout continues to unfold.

I wish you all a great weekend!