As expected, gold and silver have had a great run by any standard over the last several months, with the former up 17.5% from March and the latter up 41.5%. Will they continue to rise or is a summer sell-off in order?

 

In April I likened gold investment to scaling a mountain, with the peak as the forecasted trading price of $3,000 per ounce. I also said that I believed we had already left “base camp” on the climb, citing gold’s rise over the prior 18 months, and that there would be a few other “camps” on the way up where we would see gold pause or dip. So, are we nearing one of those “camps”?

 

As shown in the charts below, when averaging the price of gold every day from 1975 to 2019, we see that gold and silver have a seasonal pattern. June and July tend to be weak, especially compared to the numbers they reach in the second half of the year.
Graph: GoldSilver.com
Graph: GoldSilver.com
It’s true that gold and silver don’t always follow seasonal patterns, and in a year like 2020 that could be especially true. While seasonal patterns remain a factor in many markets and industries, the COVID-19 pandemic and its effects seem to be the dominant influence in many if not most. Gold and silver may not be the exception to this – instead of a historic seasonal dip they may continue to rise.

 

Over the weekend I read that the CDC warned of another round of Covid-19 and is preparing Americans for another country-wide stay at home/shut down this fall… Stay tuned as that would rock the markets once again.

 

There is no way to be certain of what will happen for gold and silver this summer, but it may be prudent to buy both metals no matter what. Both the historic seasonal graphs and pandemic patterns suggest that both metals could be much higher later in the year, making the next several weeks a crucial time to purchase regardless of which forecast you trust.

 

Whether you’re allocating physical gold and silver for wealth insurance or for investment, now could be your best chance to find your best position in both metals. Contact me today to discuss what this would look like for your portfolio or those of your clients.