Gold and Silver Prices Into Summer

COMEX gold and silver have continued their current consolidation phases as summer begins. However, we are about to enter a period of the year that has, over time, proven to be quite positive for prices. Let's discuss that today.

First, some economic background. It appears that the U.S. economy has begun to slow rather dramatically, and speculation has increased that the first of what will be several fed funds rate cuts should begin in September as fed funds futures now fully price in two rate cuts before the end of the year.

COMEX Gold and Silver Price Movements

COMEX gold and silver prices have taken notice with COMEX gold reaching $2400 again last Friday while COMEX silver moved back over $30. These moves up from support are encouraging but, for now, both digital metals remain within their current price consolidation ranges as they work off any speculative excesses from the highs seen back in May.

Summer Seasonality and Price Targets

However, we are about to enter a time of year when gold prices often move higher. As you can see on the seasonality chart below, the period of late July through August is usually quite strong for COMEX gold (and silver too).

So if we are on the cusp of a breakout and extension higher, what are the next price targets? Let's start with gold. As you can see on the weekly chart below, the spot price broke out of its 3.5-year trading range at the end of 2023. After consolidating through January and February, it exploded higher for a 20% gain in March and April before entering its current consolidation. I'd expect the next breakout rally to add another 10% to price, so that makes our next target somewhere near $2650-$2700. Under what conditions might we expect this year's late summer rally? An acknowledgement from the Fed that rate cuts are, in fact, pending ought to do it.

And now I want to look very closely at the chart of spot silver posted below. Compare it to the chart of spot gold above. What do you notice? What should grab your eye is how silver is currently in the same position gold was in January and February!

To wit, the spot silver price broke out on the monthly chart in May, and then it confirmed that breakout in June with its highest quarterly close since December 31 of 2012! The long-term breakout of gold in late 2023 manifested itself in the rally of March and April. This current long-term breakout in silver will have the same impact in August and September. In fact, it may have already begun with the $2 move higher on July 3-5.

As such and as a reminder, the post-breakout rally in COMEX gold was about 20%. The post-breakout rally in COMEX silver should mirror those gains, and I expect price to move from $30 to $36 in the weeks ahead. Look again at that seasonality chart and you can see how these prices might be attained by late August or early September.

The monthly chart of silver confirms the $36 level as a target. As you can see below, the area between $34 and $36 served as stout resistance during the failed recovery of 2012. I'd expect those levels to pose the same resistance later this summer too.

Conclusion and Key Takeaways on Gold and Silver Prices this Summer

In summary, we are about to enter a time of year when the COMEX precious metals typically trade higher. As they are near breakout levels, the next move higher should generate enough new momentum to rally prices as much as 10-15%. As such, stackers of physical metal might consider acquiring additional metal now before prices move upward later this summer.