Is the correction over?

Gold and silver prices have surged over the past three trading days, with silver pushing back up toward USD $60 per troy ounce (oz), while gold has pushed back above the USD $4,100oz price level. 

The move is not a surprise, with gold rallying from key technical support levels, with opportunistic buyers adding to their metal positions in recent days. Long-term accumulators continue to buy physical bullion in the USD $3,900oz to USD $4,150oz price range. 

What has been pleasing about the price action in the past three days is the broader environment in which it has occurred. Expectations for a potential Fed interest rate hike in September have strengthened, while yields across the curve have risen. The U.S. dollar (as proxied by the DXY, or Dollar Index) has also rallied, last trading above 101, while the conflict in the Middle East shows no meaningful sign of easing. 

Expectations of tighter policy, higher bond yields and a higher USD would typically be a trifecta of bearish news for gold—or at least headwinds to any price rally—but it has not played out that way in recent trading days. 

At a minimum, this suggests there is the potential—though not the guarantee—that gold could continue to rally from here, with silver likely to follow suit.  

Trading activity that we are seeing at The Victoria Bullion Exchange demonstrates a notable uptick in demand this week, for gold as well as silver. Many clients understandably want to see some positive price momentum, and a clear bounce off the all-important USD $4,000oz price point for gold, before adding to their positions. 

If conditions mimic what we have seen in recent history, those adding to their positions at current price levels are likely to be well-rewarded, meaning that a near 40% rally in gold (and a 100% rally in silver) could be seen by January 2028, should the market reclaim prior highs.  

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