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Yesterday was a very important day because both gold and silver have finally smashed through two critical levels, $4,000 and $50.

These are levels that many people, including myself, have been closely watching, and this breakout confirms that the powerful rally which began in late August is continuing without interruption.

This is particularly significant because there was a strong chance they would pause at those levels. But aside from a brief pullback on Thursday, they showed no real hesitation. 

I am very encouraged by this development, and I will now show you what I am seeing and what I expect next.

Let’s start with COMEX gold futures. For the past several trading sessions, gold futures moved above and below the key $4,000 resistance level without a decisive breakout until yesterday. 

When it dropped back below that level on Thursday, I noted that gold may have been rejecting this important psychological level and might enter a brief pullback or consolidation to work off its overbought condition.

Surprisingly, however, gold showed enough strength to break through $4,000 decisively yesterday, and it did so on strong volume, which provides additional confirmation. This is a strong sign of momentum and indicates that the rally is likely to continue even higher in the near term.
 

I also want to show the chart of spot gold prices for additional confirmation. Recently, spot and futures prices have diverged more than usual, which made it harder to determine whether a true breakout above the critical $4,000 technical and psychological level had actually occurred. 

That confirmation didn’t come until yesterday, when both spot and futures prices closed decisively above that level. In my view, this officially confirms the breakout and reinforces that gold’s rally is still very much intact.
 

Now that gold has closed above the $4,000 level, it brings back into focus the $4,400 price target I projected all the way back on August 4, before gold had even begun its current rally.

While this breakout indicates that gold’s rally likely has several hundred more dollars of upside in the near future, it is currently quite overbought. A healthy pullback may be needed soon. The good news is that $4,000 should be the new floor.

Assuming gold pushes up to the $4,400 vicinity, I could see it pulling back to retest the $4,000 support and then using that level as a base to continue climbing. 

From there, a move toward $5,000 in 2026 is quite plausible, which aligns with Goldman Sachs’ recent projection.
 

Next, let’s check in on gold priced in the World Currency Unit (WCU), a composite currency based on the GDP-weighted average of the world’s 20 largest economies. 

In many ways, it provides one of the most balanced and accurate reflections of gold’s true global performance, as it removes the influence of U.S. dollar fluctuations. That is why I pay close attention to it.

I’ve been paying close attention to gold priced in WCUs lately, because an important psychological level of 3,000 had formed there, paralleling the $4,000 level in gold priced in U.S. dollars. 

I had been watching for a breakout above that level as further confirmation of strength, and sure enough, we got that yesterday. This is a strong signal that momentum is likely to continue in the near term.
 

Next, let’s turn to silver, starting with COMEX silver futures. The $50 level has been the key focus for many, as it marked the peak of both the 1980 and 2011 bull markets. 

Silver has never traded above that level in its history, so all eyes were on whether it would finally break through.

This time, the breakout was far more likely because $50 is a much lower number in real (inflation-adjusted) terms than it was in 1980 or 2011, and silver remains significantly undervalued by historical standards.

Sure enough, yesterday marked the first time that COMEX silver futures closed above the critical $50 level. This follows the spot price of silver, which had already surpassed $50 on Friday and is currently trading about $2 per ounce higher. The unusual backwardation is being driven by a physical silver shortage in London.

I’m very encouraged by this development, although I would prefer to see COMEX silver futures push through the $50 level with a bit more strength. That said, there is a strong likelihood we will see a more decisive move in the next few trading sessions.
 

The spot price of silver, which is primarily determined through London cash trading, clearly surpassed the critical $50 level yesterday. This is a strong sign of momentum. 

With this breakout, silver is now in blue sky territory, meaning no one who has ever bought silver is currently holding it at a loss, at least in nominal terms.

I expect this to trigger a significant shift in investor sentiment. It will likely attract a new wave of younger investors who do not carry the emotional baggage of those who experienced the sharp crashes following the peaks in 1980 and 2011. 

This fresh participation should help create a virtuous cycle that pushes silver to $100 relatively quickly, and eventually much higher, as I will explain later in this piece.
 

Next, let’s take a look at my Synthetic Silver Price Index (SSPI), which is my trusty proprietary indicator for assessing whether silver’s moves are genuine or simply fakeouts intended to trick retail investors.

I have previously discussed how the SSPI had been forming an ascending triangle and explained that a breakout from that pattern would mark the beginning of the next major phase of silver’s bull market. 

That scenario has now played out exactly as I had anticipated, and I’m very pleased to see the SSPI once again prove its effectiveness.
 

Now let’s look at the very long-term chart of silver, which goes back to the 1960s, to understand just how critical the $50 level is. That level halted the bull markets of both 1980 and 2011, stopping them dead in their tracks. 

This is why the $50 mark carries so much importance and deserves respect. It’s also why I have been watching it so closely to confirm that silver could finally break above it, giving the signal for much further gains.

We finally saw that happen yesterday, which is a highly encouraging sign, although silver must remain above that level for my bullish thesis to remain intact. 
 

Now that silver has broken above its long-standing $50 level, it has confirmed the breakout from the massive cup-and-handle pattern that dates all the way back to the 1960s. This technical signal points to silver surging to several hundred dollars per ounce during this bull market!

I believe that outcome is likely for several reasons, including the fact that silver remains quite undervalued and because of the upcoming failure of the paper silver market. 

That failure will result in a scramble for extremely scarce physical silver, making the current shortage in London seem like a walk in the park comparison. In my view, what we are witnessing now is a precursor to that much larger event.
 

To wrap things up, I’m very encouraged to see both gold and silver close above their critical psychological levels of $4,000 and $50 at this time. This indicates continued momentum to the upside in the near term. 

It is a very significant development, especially since there was a strong chance that both metals might have initially failed to break through and instead entered a brief pullback or consolidation phase.

While that kind of pause will eventually occur, and will be healthy and nothing to worry about, the path of least resistance is clearly upward for now. As the saying goes, while the music is playing, you have to dance. 

I hope you are all benefiting from this epic precious metals bull market, and I will continue to keep you updated on what I am seeing.

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