Silver Surging to $50 as Gold & Miners Gain

Key Concepts

• Precious Metals Market: The overall market for gold, silver, and related assets.
• Mini Blowoff: A rapid and significant price increase in a sector, often indicating a potential short-term peak.
• Intermediate Term Peak: A high point in a market that is expected to be followed by a period of decline or consolidation before a new uptrend begins.
• Cup and Handle Pattern: A bullish technical chart pattern that suggests a continuation of an uptrend.
• Gold-Silver Ratio: The price of gold divided by the price of silver, used to assess the relative performance of the two metals.
• Rate of Change (ROC): A momentum indicator that measures the percentage change in price over a specified period.
• Intermarket Analysis: The study of relationships between different financial markets to identify trading opportunities.
• GDX/GDXJ: Exchange-Traded Funds (ETFs) that track the performance of gold miners and junior gold miners, respectively.
• SIL: An ETF that tracks the performance of silver mining companies.
• 60/40 Portfolio: A traditional investment portfolio consisting of 60% stocks and 40% bonds.

Weekly Precious Metals Market Recap and Outlook

This report summarizes the precious metals market performance for the week ending Friday, September 26, 2025, and provides an outlook for the coming weeks. The precious metals sector has experienced another strong week, with a potential "mini blowoff" that could lead to an intermediate-term peak.

Market Overview and Key Highlights

• Overall Performance: The precious metals sector has seen significant gains. Silver, in particular, had an "epic week," rising 7%. Gold miners and gold also experienced good increases.
• Silver's Breakout: Silver closed above $46 in the spot market and in the $46.30s in the futures market. A key development is silver's ability to break through resistance at $42-$44, setting the stage to retest $50 and the top of its 45-year-long base. This is described as potentially the "second greatest breakout in capital markets history."
• Gold's Consolidation: Gold is currently consolidating around $3754. Measured upside targets from its breakout remain at $3750, $3900, and $3950. The first target has already been met.
• Gold vs. Stock Market: Gold has shown a slight pop against the stock market, but the move is not considered particularly strong.
• Miners' Performance: Gold miners have experienced a "straight up" move over the past month.

Potential Headwinds: Oil Prices

• Impact on Miners: While currently strong, the bull and bear cases for miners need to consider potential increases in oil prices. Rising energy commodities and prices could eventually cut into the record margins of gold miners.
• Mitigation: Even with a 20-30% increase in energy costs, miners are expected to maintain strong margins. However, the bear case for miners could strengthen if oil prices rise significantly.

Deep Dive into Silver and Gold

Gold

• Resistance Levels: Key resistance levels for gold are at $3750 (a measured upside target), $3900, and $3950.
• Consolidation: Gold is currently consolidating, indicating a pause before potentially moving towards its higher targets.

Silver

• Support and Resistance: Silver has held above the $40 gap and is now moving up swiftly. Potential tops are being considered at $50, $55, or even $60.
• Post-Blowoff Correction: A "blowoff" implies that lower prices will follow the peak. If silver corrects from $50, it is expected to retest levels around $41-$42 or the gap around $40.
• Quarterly Chart Strength: The quarterly candle for silver is poised to break through all previous resistance levels. The all-time high quarterly close was around $37.60, and the open level this quarter was $39.990. Even if the quarter closes below $50, it suggests silver will eventually break $50.
• Analog Chart Analysis: An analog chart tracking silver's performance after gold breaks to a new all-time high shows significant potential.
  • The current move began at the end of February 2024.
  • The 1978-1980 move saw silver reach approximately $210.
  • The average of 1972 and 2009 moves (excluding the late '70s) suggests a peak around $62 by the end of January.
  • The 1972 peak was at $49 before a cup and handle pattern led to a near $100 price in March 2026 (approximately six months from the current date).
  • The current performance in black is following the 1972 pattern somewhat closely.
  • A consolidation after reaching these levels would be considered "super bullish."

Gold-Silver Ratio and Sector Peaks

• Breakdown: The gold-silver ratio has broken down, failing to test the 200-day moving average multiple times. It is expected to continue its downward trend.
• Support Level: Strong support for the gold-silver ratio is identified at 73-75. The ratio closed at 81.
• Implications for Gold and Silver Prices: A ratio of 73-75, when multiplied by a silver price of $50, could imply a gold price of $3750. A ratio of 80 with $50 silver would suggest $4000 gold.
• Rate of Change Analysis:
  • The 20-day and 50-day rate of change (ROC) for the gold-silver ratio indicates there is still room for the ratio to decline, supporting the idea of a potential peak in silver in the lower to mid-$50s.
  • The 50-day and 100-day ROC for silver also shows room for further upside before reaching historical peak levels, suggesting silver could reach $50 or even $55.
• Coincidence of Peaks: Peaks in silver often coincide with peaks in the broader precious metals sector, particularly when silver is outperforming and experiencing a "mini blowoff."

Gold Stocks and Intermarket Analysis

• GDX (Gold Miners ETF):
  • GDX has made new highs. The 20-day moving average of new highs in GDX is at 42%, which is significantly above previous peaks (e.g., 2016).
  • The long-term chart of GDX is described as a "rhino horn," indicating a potential imminent peak followed by a consolidation period of six to nine months.
  • Reason for Continued Strength: Despite being overbought, GDX and other gold stocks have continued to perform well due to capital flowing from conventional portfolios.
• GDX vs. 60/40 Portfolio:
  • GDX has broken out from a 12-year-long base against a 60/40 portfolio. This signifies capital moving from traditional stocks and bonds into gold stocks.
  • This breakout increases the odds of further upside, though an intermediate-term peak and subsequent consolidation are possible.
• GDXJ vs. 60/40 Portfolio (Junior Gold Miners):
  • GDXJ has also reached its 12-year-long base against the 60/40 portfolio, indicating strong capital inflow into junior miners.
• Intermarket Analysis Significance: Comparing markets against each other (e.g., GDX vs. 60/40) provides crucial insights into capital flows and potential market movements.

Silver Stocks

• SIL (Silver Miners ETF):
  • SIL closed at $70, having broken out above resistance at $65.
  • The measured upside target is around $75, with potential resistance also at that level and all-time highs.
  • SIL could move slightly higher before reaching its peak.
• SJ (Silver Juniors ETF):
  • SJ closed at $22.
  • The measured upside target is approximately $27-$28.
• Outlook: A surge in these ETFs in the coming week could signal an approach to their targets and contribute to an intermediate-term peak in the sector.

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Conclusion and Takeaways

The precious metals market, particularly silver, is experiencing a significant upward trend, potentially in a "mini blowoff" phase. Silver has broken key resistance levels and is poised to test $50 and beyond. Gold is consolidating but has met its initial upside targets. While the outlook for precious metals and miners remains strong, driven by capital flows from traditional assets, potential increases in oil prices could pose a future challenge. The analysis of technical indicators, historical patterns, and intermarket relationships suggests that while further upside is likely, an intermediate-term peak is also a possibility in the near future, which may be followed by a period of consolidation. The speaker reiterates the importance of focusing on quality and value in mining stock selection.