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 has a visible outperforming period from mid-summer to November—per equity clock’s chart below.
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 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.
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
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