Gold is following through on last week’s bullish setup, signaling that the next 10–15% rally could be starting today.
September is historically a volatile month for stocks, and that seasonality often drives investors into “safe harbor” assets. At the top of the list: gold and silver.
Since May, gold has traded in a relatively tight 5% range, between $300 and $315. That consolidation appears to be breaking after last Friday’s 0.97% surge, which capped a five-day, 2.66% rally and pushed GLD shares above their top Bollinger Band.
What Does that Mean for Gold Prices?
When a stock or ETF pushes above its top Bollinger Band, it suggests that momentum is building strongly to the upside. It often signals the start of a breakout move rather than just short-term noise.
Gold has flashed similar signals in the past few months, but those rallies fizzled as momentum slowed.
This time looks different. Trading volume is climbing, which shows stronger investor demand for gold as a defensive, long-term asset.
The last time GLD gave this signal was in April, just before the Trump Administration announced its tariff policies. Gold rallied 9% in just eight days before settling into the recent three-month range.
In January, a similar setup led to a one-month rally of more than 10% in two weeks.
Short-term Outlook for Gold
This week’s follow-through will set the tone for the rest of September.
Lower interest rate forecasts, rising volatility, selling pressure in stocks, and ongoing tariff concerns are all combining to fuel demand for gold and higher prices.
Bottom Line for GLD: Expect the U.S. Gold Fund (GLD) to break above $320. That would be a trigger for a 1–2 month move higher, with a price target of $350, as we navigate one of the most volatile seasonal periods of the year.
Don’t Overlook Silver.
The metal tends to move with gold, but with much higher volatility.
That means when gold breaks higher, silver often reacts like a slingshot, amplifying the rally.
With prices already above $40 for the first time since 2011, silver is well-positioned to outperform gold on a percentage basis.
Investors should expect sharper swings, but also greater upside potential, as silver’s dual role as both a precious metal and an industrial commodity accelerates demand during this breakout period.
— Chris Johnson
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Source: Money Morning
