Unlike July-August, August- September, at least thus far, has been an excellent, profitable month for precious metals investors (well, that is, for precious metals buyers – traders who have unwisely chosen to short sell gold or silver are likely looking at some painful losses).

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Here at TGR, we do our best to help you stay on top of the precious metals market with the latest news and analysis. One note that I want to make at the beginning of this technical review (before I forget to mention it) is that, historically, gold and silver prices have tended to experience a dip to the downside in September, prior to rallying into the end of the year. However, so far, September is looking like a big up month (the price of gold is up about $70 per ounce since the end of August). I take that strongly-against-historical-trend price action as a bullish sign, just based on the reasoning that when a commodity price moves sharply higher during a time frame when it typically falls, that shows a lot of bullish strength in the market.

(The Usual Note: I’m writing this monthly technical analysis on Tuesday-Wednesday, September 17^th-18^th. Any significant price action, up or down, that has occurred since that time should be taken into consideration as you do your own market analysis. The Usual Disclaimer: The market analysis presented in this article is purely my view of things, which is sometimes brilliantly on target…and sometimes abysmally off the mark. For example, I pretty well nailed the silver market in last month’s analysis – after having missed badly in my analysis of silver’s support level in my writeup on the month before last. I just always want to take care to make the point that investors should always do their own due diligence in researching and analyzing investments – in gold, silver, or anything else – rather than relying on the judgment of myself or anyone else. My monthly analysis is simply offered as one more viewpoint on the precious metals market to consider.)

Without further ado then, let’s review the past 30 days of price action for gold and silver, by taking a look at the daily, weekly, and monthly futures price charts.

Technical Analysis of Gold – Most Recent Price Action

As usual, I’ll open up with a look at the daily gold futures chart, with the aim of – 

• Analyzing gold’s price action over approximately the last month of trading
• Examining the current level of gold prices in relation to a couple of primary technical indicators - specifically, the 20-day and 50-day exponential moving averages

(Yet another customary note: My monthly technical analysis is done using the nearby COMEX futures charts. There is, of course, normally a slight difference between spot prices and the most nearby futures prices. Recently, nearby gold futures prices have been running about $30 above current spot prices for gold, while nearby silver futures prices are currently about 30 cents above the spot price of silver.)

Although, of course, it has had up days and down days, the price of gold has essentially steadily advanced over the past month and made substantial gains. The gold futures price closed at $2,492.00 on August 15^th. As I’m writing this, gold futures are more than $100 per ounce higher, sitting at $2,602.

Looking back to the end of July, you can see that the 20-day exponential moving average (EMA) - blue line on the chart - bears a striking resemblance to a trend line that one might have drawn, with a nice, steady upslope of about 45 degrees.

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The 20-day EMA has proven to be a solid price support line for gold on each pullback or price consolidation move. Therefore, until I see some markedly different price action, I would expect the 20-day moving average to continue to serve as a price support marker. Gold’s sharp move to the upside over the past several days sees the 20-day EMA having advanced all the way up to approximately $2,550. In comparison, it was sitting at about the $2,450 price level this time last month.

Here’s the same chart, with the 50-day EMA applied to it (still shown with a blue line). The last time that the 50-day moving average was even briefly touched was back in late July. Since that time, all the price action in gold has occurred well above that level. Based on the fact that the 50-day EMA line proved to be a price support previously, I would look for it to continue to be a secondary support level, should price action take the price of gold substantially below the 20-day moving average price.

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As with the 20-day moving average, the 50-day moving average for gold has moved significantly higher over the past month, moving up from approximately $2,410 to just a bit below $2,500.

Combining these looks at the price action in gold, I’m taking those two respective moving average levels, the 20-day and 50-day EMAs, as pegging support for gold between $2,500 and $2,550. The daily chart also shows a pretty solid horizontal price support line around the $2,525 level, right in the middle of that range.

I find taking a look at the MACD on the daily price chart an encouraging view for gold bulls. Both the MACD signal line and the MACD histogram turned to the downside from the end of August until just last Friday – September 13^th. However, during that time frame, gold prices only pulled back and consolidated about $25 lower, prior to the sharp move to the upside that has occurred over the past several days. That strong move higher in price has now turned both MACD indicators back to the upside, showing increasing bullish momentum.

While it’s certainly possible that gold prices may experience some corrective downside retracement from the current price level – perhaps moving back down toward the 20-day moving average line that’s been steadily moving higher – the daily chart appears to present a solidly bullish picture for gold at the moment.

Long-term Technical Analysis of Gold

Let’s move on to take a look at the longer-term picture of gold price action by punching up the weekly chart. The weekly chart shown below – which goes all the way back to late 2022 – shows that the 20-week EMA, like the 20-period moving average on the daily chart, has provided a pretty solid track of the long-term bull market in gold. However, investors may want to note that the one time within the past two and a half years during which gold prices dipped significantly below the 20-period moving average on the weekly chart occurred during the last two weeks of September in 2023.

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While the daily chart showed us a pretty solid, extended price support line around the $2,525 level, you have to go back down to around the $2,300 to find a similar extended price support level that was established over a period of several weeks on the weekly chart. Personally, I don’t foresee gold prices dropping back down to anywhere near $2,300 in the near future, it’s still a potential price support level worth noting in the event that gold prices fall back substantially.

The MACD viewed on the weekly chart shows the MACD signal line indicating very strong upward momentum, but the MACD histogram looking only slightly bullish. Frankly, I’m not sure what to make of that contrast. Are we going to see a turn to the downside that flips the MACD signal line negative and drops it substantially lower…or are we going to see a continued upward price surge that brings the MACD histogram reading more in line with the current MACD signal line indication of very strong upside momentum? A third possibility would be a period of price consolidation, during which the MACD signal line drops down a bit while the MACD histogram moves up a bit.

Gold – Monthly Chart

Last but not least, let’s take an even longer-term look at the gold market by viewing the monthly chart. As usual, on the monthly chart I’ll go with using a 12-period EMA because of the fact that there are 12 months in a year. (That seems reasonable, right?)

The price action shown for gold on the monthly chart extends back as far as mid-2017.

As with the 20-period EMA on the daily and weekly charts, the 12-period EMA on the monthly chart has served to pretty reliably indicate the track of gold prices over the past several years.

It’s worth noting that the 12-month EMA currently sits right around the same level as the long-term horizontal price support level that we identified on the weekly chart, at about $2,300. I’d say that reinforces that price level as a long-term price support.

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Both the MACD signal line and the MACD histogram on the monthly chart indicate strong bullish momentum that extends all the way back to early 2023. However, I’ll repeat here the exact same cautionary note that I made in last month’s technical analysis regarding the MACD indicators – 

“The only cautionary note here is that they are both near the highest levels that they’ve previously reached over the entire time frame shown on this chart. That doesn’t necessarily mean that they can’t continue higher – only that it shouldn’t come as a shock if they should take a turn to the downside. However, should that occur, I’d note that a previous extended drop in the MACD levels, from 2021 to 2023, did not portend a major decline in the price of gold. Rather, after an initial moderate pullback, gold prices mostly just consolidated and traded in a range over that time period while the MACD kept falling.”

Technical Analysis of Silver – Most Recent Price Action

And now for a look at the past month’s price action in silver. Here’s an interesting tidbit of information: The London Bullion Market Association (LBMA) reports that the eight major bullion banks now hold the largest short position in silver that has EVER been held in ANY commodity since such record keeping began. I’d venture to say that those short positions are getting pretty painfully squeezed at the moment. But then, one has to take into account that these major banks, backed by central banks, have a virtually unlimited supply of cash to play with. So, the question isn’t so much how long can they continue trying to artificially suppress silver prices as how long will they continue that effort.

The next question then becomes how successful will their price suppression efforts be. They managed to give silver a harsh smackdown in July-August, but that down move proved unsustainable and silver prices have since turned sharply higher. Silver futures are currently around the $31 an ounce level, approximately $5 an ounce higher than their early-August low, a dollar higher than their August high, and nearing the highs scored back in May, up around the $32 an ounce level.

The month before last, I was too optimistic in pegging support for silver around $30 – it dropped to almost $26. But last month I pretty much nailed it, pegging support at $28, which was almost precisely the low scored on September 6^th. Since then, silver has enjoyed a strong recovery to back well above the resistance level of $30 an ounce.

A look at the daily chart shows silver repeating its pattern of swinging back and forth across the 20-day exponential moving average, but, overall, continuing to push higher. Over the past month, the 20-period EMA has moved higher by more than a dollar, from $28.32 to $29.53. I think it will be a significant bullish sign if the 20-day moving average can follow price and move above the key resistance level of $30 an ounce.

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The MACD on the daily chart of silver shows both the signal line and the MACD histogram, after turning to the downside in the first part of September, reversing very strongly to the upside over the past week. The MACD clearly indicates strong bullish momentum, but momentum that may still be building. Although both are in positive territory, neither the MACD signal line nor the histogram are anywhere near their highs of the past year.

Putting the 50-day EMA on the chart, and looking back to the highs silver notched in May, one can see silver moving in a way where it appears poised to make a move to the upside that is playing out as almost an exact reversal of the downside retracement that occurred from mid-May to mid-August.

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I also see it as an encouraging sign for silver bulls that the 50-day EMA – currently at $29.25 - is only a little bit behind the 20-day EMA sitting around $29.50.

Long-term Technical Analysis of Silver

Now, let’s telescope out a bit and take a look at the weekly silver futures chart, with the 50-period EMA applied to it. It’s easy to see that, going all the way back to early 2023, the 50-week moving average has held up well as a price support level for silver. Even the lowest point of the whole May to August downturn just barely touched it before silver prices turned back to the upside.

The 50-week EMA is currently around the low of the August pullback, at about $27.25. That’s a substantial gain from where it was a month ago, just above $26.50.

The intraday high hit back in May was at $32.75, so we’re still a couple of dollars below that. However, silver is only about half a dollar below its best recent closing high of $31.69.

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The MACD on the weekly chart definitely looks positive for silver investors. Both the MACD histogram and the MACD signal line are just on the cusp of turning back to the positive side. So, that appears to indicate just the beginning of upside momentum that may continue to build and help push the price of silver higher.

Silver – Monthly Chart

Finally, let’s take a look at the monthly silver futures chart, using a 12-period exponential moving average. I’ve only rolled this chart back two years, to the summer of 2022. By doing so, one can clearly see that, despite all the volatile ups and downs in the price of silver, the long-term trend has remained solidly bullish.

The 12-month EMA is up to about $27.30, right around the same level as the 50-week EMA. So, we have the same sort of coincidence of weekly and monthly moving average price support lines as we saw in the gold market.

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The MACD on the monthly chart shows increasingly solid bullish momentum ever since the beginning of March this year.

Technical Analysis of Gold and Silver Prices – September, 2024 – Conclusion

I’m bravely – or perhaps just recklessly – venturing to write this summation of the monthly technical analysis of gold and silver before the Federal Reserve announces whether or not it’s cutting interest rates – a decision that could swing the markets significantly in either direction, up or down.

There are a couple of notes I want to make here.

1. There’s a recent double top now in the gold-silver ratio at around 90, and the ratio has fallen back into the low 80s – I’ve said before that I expect the gold silver ratio to continue declining over the long term, back toward historical averages that are much lower – If that happens, then silver will be making higher percentage gains than gold, which wouldn’t be at all surprising, given the fact that it has, thus far, been lagging behind gold a bit in the long-term bull market in precious metals
2. And let me repeat the note about the seasonal tendency for gold and silver to typically suffer a bit of a decline in September before finishing the year on an upswing – Halfway through the month, the precious metals appear poised to defy that seasonal tendency and end up having a very bullish September – Of course, there’s still plenty of time left in the month for things to go south, but even if that’s what unfolds, I still expect October-December to see a typical seasonal rally in gold and silver prices…We shall see…

This month’s review of the daily, weekly, and monthly charts for gold and silver shows the overall long-term bull market of the past four years still firmly intact, reinforced by gold continuing to score new all-time highs.

Gold continues to look undeniably strong and seemingly unstoppable in its march toward higher prices. Where is it headed in the long-term? Well, depending on what market analyst you listen to, either $3,000, $5,000, $10,000, or $30,000. (I kind of doubt we’ll hit $30,000 this year, but I wouldn’t totally rule out any of those other figures as possible 2024 highs – with the current global political turmoil and the key Presidential election looming in the United States, pretty much anything is possible).

I’m going to move up my projected price support level for gold significantly, based on its recent price advances and the moving averages on the daily chart. Last month I had it pegged in the low $2,400s. I’m jumping it up by a full $100 per ounce, into the range of $2,500 to $2,550. It may dip back below $2,500, but if it does, I’d expect such a dip to be only a brief spike to the downside, followed by a resumption of the uptrend.

Gold
Nearby support level - $2,500-$2,550
Next resistance levels - $2,750, $2,800-$3,000 (I once again included $2,750 simply because it’s the halfway point between $2,500 and $3,000)

Silver has once again overcome the key price resistance level of $30 an ounce. And it’s done so impressively, moving up by $3 an ounce over the space of just a few days. I’m going to continue to beat the drum for silver, as I remain convinced that at some point it will begin to significantly outpace gold in price gains, eventually take it out its all-time high of $50 an ounce, and continue moving higher.

The precious metals market analysts whose opinions I respect the most are all saying that, just based on its basic supply and demand picture, the price of silver is headed substantially higher – like up into the range of $100-$500 an ounce.

I’m pegging support for silver now, first at the $30 an ounce level, and secondarily in the range of $29-$29.50, which fairly well matches up with the price support levels shown by the 20-day and 50-day exponential moving averages. Its upside price targets remain the May high around $32.75, and then the five-dollar increments of $35, $40, $45, $50, and higher. In the silver market, it looks to me as if the bears are starting to get worn out. However, let me repeat the cautionary note that it’s impossible to say if or when the bullion banks will finally give up their efforts to keep silver’s price tamped down. But if and when they do, silver could rocket way higher in very little time.

Silver
Nearby support levels - $30.00, $29.00-$29.50
Next resistance levels - $32.75, $35.00

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So, as of Wednesday morning, September 18^th, that’s my view of the precious metals market. Once again, the most probable near-term scenario continues to be one of higher and higher prices for both gold and silver.

You might have missed the chance to buy gold at $2,000 an ounce and silver at $20 an ounce, but you still have the opportunity to buy them before gold goes to $3,000 and silver to $40. At TGR, we’re here to help.

Thanks, as ever, to our friends at TradingView.com for their excellent charting services.

• J.B. Maverick

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Sources:

https://www.tradingview.com/

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