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.
After moving sideways since April, gold began to perk up last week, supported by several key developments. These included the approaching end of low-volume summer trading, dovish remarks from Fed Chair Jerome Powell at the Jackson Hole symposium, and a relatively benign inflation report released Friday morning.
That report featured the Fed’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) Price Index, which showed a 2.9% increase in core inflation for July. Although this is still above the Fed’s 2 percent target, the reading met expectations. As a result, both gold and silver rallied in relief, as the data kept hopes alive for a likely Fed Funds Rate cut in September.
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.