GOLD & SILVER TESTING KEY SUPPORT/RESISTANCE LEVELS

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Over the Labor Day weekend, Gold traded in overseas markets between $2,490 and $2,508 per ounce. Gold ended August trading on the 30th at $2,493 per ounce, up $64 for the month of August. Ever since it closed above $2,500 on August 19th, 2024, Gold has traded between $2,470 and the new all-time high of $2,531 per ounce.

Gold has dropped every September since 2017. Over that period, the average decline has been 3.2% in September – easily the worst month of the year, and far below the monthly average gain of 1%. However, I believe Gold may test the $2,500 level a few times this month, but stop the streak this year. Gold’s recent consolidation around $2,500 is primarily due to the upcoming lowering of interest rates, numerous weak U.S. economic indicators, and on-going geopolitical issues. I believe these issues will drive the Gold price higher, reaching $2,600 by the end of September and $2,800 by year-end.

In addition to the positive indicators mentioned above, there is strong demand for physical Gold. The world’s central banks purchased 483 tons of Gold in the first half of 2024, the highest first half demand on record (see article “Central Banks Buying Gold At Record Levels”). In addition to Central bank Gold buying, it has been reported that many international banks are adding to their Gold holdings because of the upcoming Basel III guidelines.

Today: This morning, Gold dropped, reaching a low of $2,472 before finding sizeable buying. The drop in the Gold price was due to a rally in the U.S. Dollar Index, causing the price to move lower in terms of U.S. Dollars. I believe this correction will be brief and Gold will move back to the $2,500 level.

Silver ended the month of August at $28.73 per ounce, down $0.22 for the month. Silver briefly traded over $30 per ounce but spent most of the month trading above and below the $29 per ounce level. For most of August, Silver took its price direction from Gold but did not show price strength like it did in July. The Silver-to-Gold ratio has increased to 86-to-1.

Today: Silver fell with Gold, reaching a low of $27.67 before finding bargain buyers. As Gold moves higher, Silver will move back towards the $29 level shortly.

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