Gold Silver Holdings Book Profit: Metals and miners have a predictable seasonal tendency to decline in mid to late June and make a secondary – often slightly higher low – in the late July to mid-August period.
Gold Silver Holdings Book Profit
Though not a pronounced sector-wide decline, it tends to affect most resource sector stocks to a noticeable degree, with “best of breed” companies holding up better than the rest of the cohort.
Usually by mid-August (at the latest), the miners and their associated metals have begun to strengthen, with bid-ask spreads tightening and upside volume building strength as we near Labor Day.
- Cautious market mood and US dollar’s strength keeps gold price side-lined.
- Investors digest hawkish Fedspeak amid mixed US data, ahead of key NFP.
- Gold’s daily setup suggests choppy to range-bound trading.
Because this “changing of the guard” takes place in a relatively nuanced manner, many market participants miss what’s going on, hold off adding to their stock holdings – and more importantly – physical gold and silver additions until after Labor Day when market movement offers proof of what has just taken place.
In practical matters, this means that those who behave this way end up paying more for their metal, not only in terms of the absolute price, but also get stuck with higher premiums and in many cases, questionable availability.
So, if you are planning to “top off” your stash anyway, why would you wait until the market has already confirmed what you have been suspecting?
Several analysts whom I follow do well at parsing out the summer scenario, with some startling implications about what may lie just ahead this time around.
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Adam Hamilton, in his weekly free letter Zeal Speculation and Investment, says:
Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year. While seasonality doesn’t drive price action, it quantifies annually repeating behavior driven by sentiment, technicals, and fundamentals.
We humans are creatures of habit and herd, which naturally colors our trading decisions. The calendar year’s passage affects the timing and intensity of buying and selling.
Gold stocks exhibit strong seasonality because their price action mirrors that of their dominant primary driver, gold. Gold’s seasonality generally isn’t driven by supply fluctuations that grown commodities see, as its mined supply remains relatively steady year-round.
Instead, gold’s major seasonality is demand. Today gold stocks are once again back at their most-bullish seasonal juncture, the transition between the typically-drifting summer doldrums and big autumn rallies.
Craig Hemke of TFMetalsReport.com:
Many fear that this price manipulation scheme, which has been in place since 1975, will continue indefinitely. I can assure you that it WILL NOT. Instead, a moment will come when the overstretched fraud of the derivative markets will snap.
When this happens, it will be recalled in the same manner that Hemingway once described bankruptcy – the current pricing scheme will fail “gradually and then suddenly.” Those who continue to plan for this inevitable event will find themselves rewarded, and, most importantly, protected when it finally occurs.
