A New Month for Gold and Silver Prices 

After finishing August with new highs for the year, the month of September begins with prices ready to break higher. But risks remain and we must be wary of a late week reversal as important economic data looms. 

The week began with a market holiday in the United States, but that didn't mean prices were quiet elsewhere in the world. While the U.S. markets were closed, gold and silver prices surged in Shanghai and London and finished Monday with strong gains across the board. 

After the great finish to August, this was a terrific way to start September. However, as we often discuss at TF Metals Report, it's not how you begin the week that matters, it's how you end it. And the week ahead will bring all sorts of potential trouble spots for the precious metals. 

Gold Prices Breakout Potential

Right away on Tuesday, we'll get another update on the manufacturing sector with the latest PMIs from S&P and ISM. These numbers have disappointed of late, and a continuation of the recent weakness will only lead to greater concerns of recession, so watch for these headlines on Tuesday morning. 

Midweek brings the latest JOLTS report, which measures job openings and other internal components of the labor market. After the recent downward revisions to the monthly payroll reports, this latest JOLTS data is certain to have an impact on the markets when it's released at 10:00 a.m. ET on Wednesday. 

Watch Silver and Dollar Trends

The fun continues Thursday with the release of the service sector PMIs. Like the manufacturing PMIs, the service sector PMIs have been fading of late and moving into sub-50, contraction territory. Another round of weak numbers, particularly from ISM at 10:00 a.m. ET, will serve to increase recession and rate cut odds. 

And then Friday brings the latest edition of the monthly non-farm payrolls report, or as we like to call it, the BLSBS. After the disastrous July report with significant negative revisions to May and June, all eyes will be on this August report when it's released Friday morning at 8:30 a.m. ET. 

Through all of this, what will be the net impact on precious metal prices? As noted above, prices have begun the week and month on an uptick, but can prices persevere through Friday? What if the data surprises to the upside and this triggers a reduction in rate cut expectations? A reversal would certainly stall the optimism and excitement that is percolating in the markets as the week begins. 

As such, be sure to watch the U.S. Dollar Index. After trading sideways for the past few months, this index appears poised to break from its range in the days ahead. The economic data this week will likely be a key driver in determining whether we're dealing with a strong or weak dollar into the final months of 2025. 

U.S. Dollar Index (Weekly Chart) 

And watch the bond market too. Weak economic data is likely to drive a bid for bonds, but conversely, strong data is sure to bring selling and higher rates. The yield on the 10-year note is currently near 4.25%, but if weak economic data drives it closer to 4.0% again, you should expect gold to remain well bid. 

Yield on the 10-year note

Technical Breakout Scenario 

And it's that bid for gold that needs to be maintained. The month begins with price breaking out of a four-month consolidation period, and if the current pattern continues, this next breakout might add as much as 15-20% to price in a move that heads toward $4000/ounce.  

Price of Gold (Weekly Chart) 

But that's the key: "if the current pattern continues". Gold appears to be breaking out as September begins, but we can't be certain of that just yet. The price action this week will be important. Watch the headlines each day. Be ready for volatility and let's hope that price finishes the week as strongly as it began.