Into Month End for Gold and Silver Prices

We're nearly at the end of August, and Friday will bring the monthly close for gold, silver, and the mining shares. The monthly charts are important for determining and recognizing the long-term trend in prices, and the printing of the August charts might go a long way toward driving more institutional and generalist cash into our sector over the remainder of the year. With that in mind, let's take some time this week to review the monthly charts and see if there are some key levels to watch into Friday's close.
Let's start with the spot price of gold. On the weekly chart, the trend is undeniably higher, but price is currently relegated to the same sort of sideways consolidation that has been seen on three previous occasions over the past two years. You might be sure to notice that price has surged 15-20% each time the consolidation finally ended. Could price be ready to surge again soon?

Price of Gold (Weekly Chart)

The monthly chart might help us to answer that question. As you can see below, the spot price of gold is just a few days away from printing another new all-time monthly closing high. Simply trading sideways this week would constitute a victory and paint a pretty green candle onto this chart. A Friday close north of the round number $3400 would generate a lot of extra enthusiasm and almost assure a September breakout for the daily and weekly charts, too.

Price of Gold (Monthly Chart)

Turning to spot silver, the weekly chart shows consolidations that are similar to spot gold, though the pattern is a bit more ragged and drawn out. Regardless, you can see the importance of a weekly close above $39.

Price of Silver (Weekly Chart)

Like gold, though, it's the monthly chart where you can really see what's happening. By simply trading sideways this week, spot silver will paint its highest monthly close in fourteen years! Simply holding and closing above $38.00 will keep this chart looking spicy, but, like the weekly chart, a Friday close above $39 would be extra compelling.

Price of Silver (Monthly Chart)

 And when it comes to the mining shares, let's use the big ETFs with the symbols GDX and GDXJ as proxies for the sector. Let's start with the GDX. On the monthly chart, you'll be reminded of the massive head-and-shoulder top that ended the bull market in 2012 and sent prices tumbling for nearly a decade. Now that the price of GDX has returned to those levels, you should expect stout resistance at the $55 "shoulders" and $65 "head".

Below, note that the resistance at $55 has now been breached, and closing the month above that level clearly sets the next target at the old all-time highs between $64 and $67.

Vaneck Gold Miners ETF Price Chart (1)

As an aside, at TF Metals Report, we spent years waiting for a breakout of what we used to call the "Mother of All Pennants". Below you can see that, so far at least, it was well worth the wait.

Vaneck Gold Miners ETF Price Chart (2)

 And the GDXJ is painting some important chart action, too. This thing got absolutely obliterated in the period 2012-2015. But like its big brother, the GDX, it has since turned and begun to rally back. Finishing the month with a closing breakout above $70 sets the next targets at $90 and $100. Maybe you're not a mining share investor and you don't think that's important? Look at it this way then. What type of new rally in the gold price would spark another 25% rally in the GDXJ? Do you now see how these charts connect?

Vaneck Junior Gold Miners ETF Price Chart (Monthly)

As I type this, it's only Monday morning at about 11:00 a.m. ET, and this means that the weekly close is still 100 hours away. A LOT can happen between now and Friday, making all of these charts look prescient or obsolete. As such, keep an eye on prices all week and then maybe print your own charts over the holiday weekend to see if the stage will be set for another explosive phase of this bull market in September.