Gold & silver – ready for a seasonal pop?

Gold and silver have an interesting seasonal potential from the summer into the late part of the year. Officially, silver is in its best seasonal period of outperformance through the early part of the calendar year – but if you look at the seasonal chart (courtesy equity clock.com) you will see it can bottom in the early part of the summer and move up into November.

Gold and Silver Seasonality: Monthly chart of silver futures seasonality over the pat 20 years
Gold has a visible outperforming period from mid-summer to November—per equity clock’s chart below.

Gold and Silver Seasonality: Monthly chart of gold futures seasonality over the past 20 years

 

If we turn to the price charts of these two commodities, you will see that gold and silver are consolidating. Silver needs to break out of the very rough looking triangle by taking out about $17.

Gold and Silver Seasonality: Monthly chart of silver showing a rough symmetrical triangle after period of sustained decline

 

Gold has a more encouraging chart than silver at this time. The metal looks to be breaking its triangle at around 1295, although it’s a bit early to be super confident on that assessment. If it does confirm the breakout and continue to move up, this would look like a breakout from a more evenly constructed triangle than what silver appears to be forming. That’s good news for gold bulls.

Gold and Silver Seasonality: Gold monthly chart showing a rough symmetrical triangle after a period of sustained decline

A confirmed breakout that stays above the upper lines of the triangles I’ve drawn for 3 weeks might be bullish for these metals. if they do continue to move positively over the next month, the timing would line up with the seasonal tendencies for an early summer buy-point in both gold and silver.

 

Keith on BNN


Keith will be on BNN’s popular call-in show “MarketCall” on Monday June 12th for the 1:00 pm show. Phone in with your questions on technical analysis for Keith during the show. CALL TOLL-FREE 1-855-326-6266. Or email your questions a few days ahead of time (specify they are for Keith) to [email protected]

 

3 Comments

    • Yup!
      We have 7% exposure to the sector via two drillers, and even that is too much!

      Reply
  • “The $S&P/$TSX composite index remains in a sluggish holding pattern(…) It needs to make a significant move on either side of the 15,250 to 15,800 zone in order to eliminate uncertainty(…) A strong move up or down in NY will probably be the catalyst for a breakout ou breakdown in Toronto”

    (Ron Meisels, Phases &Cycles, 30/05/2017)

    Will low oil price be the catalyst on the downside?

    -rebound seen at $45.00 on oil or $9.20 on USO (but weekly chart on USO also showing possible support at $8.00 area.) (Stock Chart)

    Reply

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