To The Moon

Key point：Whether gold can post a meaningful new high is a key yardstick for judging whether silver is due for a sharp pullback.

Driven by silver’s relentless march to new highs, gold finally showed some movement last week. However, on the one hand, even as futures made new highs, spot prices have not yet kept pace; on the other hand, the futures “new high” itself looked more symbolic than decisive. This reluctance to follow silver is concerning. Although silver has effectively been the true leader since April this year, gold’s historical status means its value still cannot be ignored.

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To break its prior historical high, gold futures took two months—far behind silver—and even after the breakout, the contrast between the two is stark. When silver broke out in November, that week produced a strong bullish candle, followed by a series of consecutive bullish candles. Gold, by comparison, printed only a small bullish candle last week. Under normal circumstances, a valid breakout attracts fresh momentum buying—seen as acceleration after the breakout. Without that follow-through, the market faces the risk of a bull trap that can ultimately exhaust demand and trigger a long squeeze as longs liquidate into falling prices. Therefore, even though this week and next fall within the Christmas and New Year holiday period—when market liquidity is theoretically less than ideal—bulls still need to deliver a clearly visible advance to confirm the breakout’s validity.

Otherwise, it is hard not to think of what happened in the crypto market in the third quarter of this year: after Ethereum surged, it stalled; Bitcoin eventually mustered one final push to set a fresh all-time high, but once its strength was spent, it quickly looked like a spent force. Then, an unexpected event led to a trend reversal and a broad evaporation of total market value. This kind of cross-asset linkage and correlation is still worth monitoring.

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Based on the above, the market outlook and practical trading plan become clearer

With the reasoning above in place, the direction of the market—and the actual trading approach—takes on a more defined shape. Into year-end, if gold can extend its advance (in this view, that means rising at least above 4450 and holding there), then the broader precious-metals market can continue higher; and within that move, silver will likely remain the leading outperformer. If gold fails to sustain an advance, then whether it moves sideways, declines, or even reverses, any of these outcomes would be a precursor signal that the market has topped.

If, over the same period, silver begins to show wide, high-level volatility or a pullback, then it would essentially be time to take profits. Given how clear the current trend is, the primary strategic choice should still be to follow the trend; anyone looking to trade against it needs to wait until a more explicit price structure emerges before acting. That said, counter-trend trading is not entirely without merit—at minimum, it can offer a more favorable risk–reward profile. Historically, once a top is completed and the trend turns, a 20–30% pullback in gold is not unusual, and it is also a reasonable assumption that silver could be cut in half

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