A Gold & Silver Technical Update

Gold and silver are currently consolidating in a healthy manner, which is likely laying the groundwork for their next leg higher.

With the U.S. Memorial Day weekend winding down, I want to share a timely technical update on gold, silver, and mining stocks. I’m encouraged to see them consolidating in a healthy manner—as I anticipated—which I believe is ultimately laying the groundwork for the next leg of the bull market. Precious metals are also finding support from Moody’s recent downgrade of U.S. debt—a sharp reminder that the nation’s fiscal crisis remains far from resolved. In this environment of debt saturation, precious metals continue to stand out as reliable safe havens and powerful hedges against systemic risk.

First, let’s take a look at gold in the form of COMEX futures. I’ve noticed that gold tends to move in clean $100 increments, with strong support and resistance forming around round numbers like $3,000, $3,100, $3,200, and so on. After briefly dipping below $3,200 a couple weeks ago, I’m encouraged to see that gold bounced back and even pushed above $3,300—an early sign of renewed strength.

At the moment, it appears to be consolidating sideways, catching its breath before the next move. The major resistance level to watch now is $3,500, which roughly aligns with the April 22nd high. A decisive breakout above that level—especially on strong volume—would confirm that gold is ready to charge toward $4,000. That’s the scenario I’m watching for closely.

Back on April 22nd, I published an update claiming that gold had likely hit a short-term peak and was due for a mild pullback—and that’s exactly what we’re seeing now. What tipped me off was the formation of a spinning top candlestick on that day, signaling indecision after a strong rally, combined with short-term overbought conditions that called for a cooling-off period. At the moment, COMEX gold futures are trading within a $300 range between $3,200 and $3,500 as the metal digests those prior gains.