With the gold price consolidating outsized gains since reaching an all-time high at $3500 in mid-April, silver decisively cleared major multi-year resistance at $35 on a quarterly closing basis last month, confirming a technical breakout on strong demand and speculative interest.
While the gold price continues to consolidate outsized gains inside of a now 3-month bullish symmetrical triangle above $3300, both silver and precious metals juniors are catching up during the slower summer months.
Silver Futures surged to their highest level in 14 years mid-week, aided by worries about U.S. tariff policy, signs of tightness in the spot market, and growing investor interest in alternatives to gold.
This renewed momentum pushed the Gold/Silver Ratio (GSR) down to 85, its lowest level since January. The next major support in the GSR is at 75 to 1. Below there, 30 to 1 was the level reached at the peak of the 2011 bull market, and 15 to 1 was reached at the peak of the 1979-80 bull run.
Following a major breakout above multi-year resistance at $35 the first week of June, the silver price is now up nearly 40% from its April spike low to Thursday’s close above $39 per ounce.
Yet, after 45 years and a 40-fold increase in the U.S. federal debt, the silver price is still trading 20% below its historical high at $50, while the gold price continues to post all-time highs in every major currency.
Other metals have also been moving up as copper, platinum, and palladium all made fresh highs this week. Copper Futures made an all-time high Thursday at $5.93/lb, as the U.S. market continues to brace itself for a 50% tariff on the red metal next month.
In March 2024, the gold price broke out of a technically powerful 13-year cup & handle pattern. Yet, both silver and the juniors had been lagging this historic move into April of this year, frustrating mining sector participants.
After President Trump’s Liberation Day on April 4 sparked a fishing line selloff in silver and the miners, confusion and uncertainty dominated sentiment as fears of a full-scale global trade war had become a reality.
But with fund managers and momentum traders on the sidelines waiting to buy weakness in undervalued gold stocks, the relatively tiny precious metals mining space quickly became an island of safety in a sea of volatility.
Prior to this brief margin call related forced selling event, the major gold miner ETF (GDX) broke out of a huge accumulative 4-year base. The fishing line selloff in early April proved to be a quick test of former long-term resistance at $43, to become major support.
With the GDX soaring nearly 40% thereafter to reach 13-year highs in early June, gold stocks have been consolidating outsized gains below resistance at $55 over the past six weeks.
Meanwhile, the silver miner ETF (SIL) has been leading gold stocks since the April low. After clearing major resistance at $49 last month, silver stocks are trading at 14-year highs along with Silver Futures.
The 2011 all-time high in GDX is $66, when gold briefly traded at $1900. And the all-time high in SIL is $94, when silver nearly reached $50 the same year.
Following a major breakout from a huge accumulative 3-year base in April, the Canadian TSX-V (CDNX), where 50% of its holdings are small-cap junior resource stocks, has been leading the miners higher with silver.
Yet, this high-risk junior index remains over 75% below its all-time high reached in 2007 when gold was trading near $1000, and nearly 30% from its highs seen in 2021 when gold was at $2000. And that is in nominal terms, not inflation-adjusted terms.
Following a spike low at 330 in early 2020, the TSX-V had tripled in just one year. A similar move back to the peak at 1113 in January 2021, would be a 75% rise from the April breakout at 640.
During the summer, investors have been booking outsized miner profits to rotate into higher-risk quality juniors. With the juniors having been under-owned and under-appreciated for more than a decade, CDNX is looking to post a fresh 52-week high for its fifth consecutive week.
Over the past several years, the slower summer months were a time for resource sector speculators to consider which juniors were going to be tax-loss selling candidates, as both liquidity and investor interest wilted from June into August.
Especially if the Street expected the company to go to market before year-end, as junior dilutive finance announcements are generally sold during sector bear markets.
But with the capital market window opening wider this summer, the CDNX is up nearly 10% in July as the high-risk junior sector continues to outperform the miners.
With the mining sector now in a bull market, higher-risk PEA-stage junior finance announcements are being upsized. And in many cases, include major and mid-tier miners providing strategic capital.
Moreover, weakness continues to be bought in the mining space, as the only gold producing company listed in the S&P 500 has just kicked off what is expected to be another stellar earnings season.
After the market close on Thursday, Newmont Corp (NEM) reported Q2 net income of $2.1 billion, significantly surpassing analyst estimates, with adjusted net income per share at $1.43, exceeding the estimated $1.16.
The world’s largest gold miner also reported a record quarterly free cash flow of a whopping $1.7 billion, highlighting the strength of its portfolio and strategic execution.
The robust earnings reflect the company’s average realized gold price of $3320 per ounce, up 40% from the second quarter of 2024.
In addition to higher gold prices, Newmont said it successfully managed costs, with All-in Sustaining Costs (AISC) falling to $1593 per ounce, down 4% compared to the first quarter.
I expect record Q2 results from the second largest gold miner, Agnico-Eagle (AEM), after the market close next Wednesday. Gold averaged $3289/oz in Q2, up 14.9% Q/Q and 40.7% Y/Y, the seventh quarterly record in a row. Silver rose 5.6% q/q to average $33.70/oz, its best quarter since Q3 2011.
At Junior Miner Junky (JMJ), my subscribers and I have accumulated shares in a basket of quality gold, silver, and copper related juniors, ahead of the major breakout in the mining sector.
The real-money JMJ Portfolio is up 95% thus far is 2025, massively outperforming both GDX and GDXJ. With the mining sector consolidating recent outsized gains, weakness is being bought quickly in the quality junior issues.
The JMJ weekly newsletter is a one-stop shop for precious metals stock speculators. Along with providing detailed macro commentary and technical analysis for subscribers following the real-money JMJ junior portfolio, the letter also teaches its members risk management via successful selling strategies.
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Full disclosure: The author owns common shares in both Newmont Corp. (NEM) and Agnico-Eagle Mines Ltd. (AEM).
