Gold Rally? The New Upward Cycle for Gold and Silver May Just Be Beginning
TradingKey - COMEX gold price has surged past its historic high, while COMEX silver recently broke its highest levels for the year, approaching the historical peak of $49.84 with just roughly 20% upside remaining. Against the backdrop of a weakening U.S. dollar and credit system turmoil, it is only a matter of time before silver surpasses its record high.
The market is not only pricing in expectations for a Fed rate cut in September but also increasingly assuming the U.S. is headed for stagflation rather than a widespread recession. These represent the two primary economic scenarios facing the country—no other outcomes appear plausible. The key difference is that a recession would likely trigger a sharp sell-off across various asset classes, followed by aggressive U.S. monetary easing and asset buying, culminating in a cycle of dollar harvesting reminiscent of previous episodes in history.
But this time, why was there no deliberate effort to burst the bubble? Instead, why is there a conscious attempt to portray a thriving American economy—such as the “significant distortion” in employment data? I believe the main concern is that the traditional dollar recycling mechanism no longer functions as before, primarily because it is stuck at the China juncture. There is a fear that the accumulated liquidity trapped in U.S. equities won’t flow back as usual but will instead move toward undervalued emerging markets and China, without returning.
Returning to the core topic, since the Federal Reserve and Treasury appear intent on managing this economic slowdown more gently—a so-called soft landing—stagflation emerges as a relatively clearer outcome. Coupled with a depreciating dollar that aids debt reduction and manufacturing reshoring, this environment could provide ideal growth conditions for commodities. Beyond precious metals like gold and silver, many other commodities remain near four-year lows, thus retaining significant upside potential.
Meanwhile, the U.S. Labor Department is expected to release August nonfarm payroll data this Friday. It is important to note that this data will likely have limited impact on the Federal Reserve’s September rate cut timing but could influence expectations for the remaining two cuts later this year. Additionally, if former Fed Chair Powell were to be replaced by a Trump ally, we could see a 4-to-3 hawk-to-dove shift within the Fed. This would mean the Treasury and Trump’s administration would effectively control U.S. monetary policy, stripping the Fed of independence. The implication is a preference for an orderly dollar depreciation, which would further benefit commodity prices.（If investors are interested, they can refer to the previous article titled — “U.S. Manufacturing Revival and a Softening Dollar: Why Commodity ETFs Could Be the Next Investment Frontier”）
From a technical perspective, taking COMEX gold as an example, its breakthrough above the $3,511. Unless it sharply falls back below this level soon—a potential false breakout —new targets of $3,700-3,800 could be reached by year end.
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Data Sources: TradingView, TradingKey As of: September 1, 2025
Finally, the question most investors are asking: After such a strong run, is it still worth getting in? Short-term price movements are difficult to forecast, so it helps to adopt a longer-term view. Around 2018 marked a watershed moment signaling the near end of globalization and the dawn of an era of de-globalization. Stock competition, resource contention, and supply chain restructuring are hallmarks of this new era. Gold and silver, as quintessential resource assets, are already undergoing a fundamental value reappraisal. These macrocycles typically span 20 years or more, meaning that while gold prices may fluctuate between
3,000 and 3,700 in the near term, the long-term value baseline should shift upward. Within this new macroeconomic cycle, gold’s role as a core household asset warrants at least a 10%-20% portfolio allocation to achieve effective hedge and diversification benefits.
