’Tis the Season for Gold & Silver
Gold has a lot going for it right now. In fact, there’s a growing list of fundamental supports for gold and other precious metals.
– Bullish seasonal factors for gold lie just ahead.
All these factors perfectly play into my forecast for much higher prices in precious metals ahead, and these forces are now intensifying.
In a recent report, analysts at Swiss banking giant UBS Group AG said (as summed up by Frank Holmes):
“Gold will outperform cyclical commodities in 2020 and that political uncertainty could send safe-haven flows into the metal.”
They go on to point out that slower growth and ultra-low or even negative interest rates “reduce the opportunity cost of holding gold” for investors, a major positive.
Gold is priced in U.S. dollars, which means recent dollar weakness could provide yet another upward force for gold prices, according to Bloomberg.
Here’s More Good News
Silver’s gains surpassed those of gold for a second straight week. But “the gold-to-silver ratio is still historically high,” says Frank, after hitting a “26-year record high in July, according to Bloomberg data.”
And there’s another big positive factor for gold that’s just a few weeks away: bullish seasonality!
You can see in the chart above that gold follows a seasonal rhythm just like most commodities and even the stock market.
The most bullish time of year for gold is from December–February, when gold has gained 6.5% on average over the past 20 years. What’s more, gold has outperformed the S&P 500 by about 6% over the same period.
Then after moving mostly sideways during the spring and early summer period, gold shines again with a second seasonally strong period of gains from August–November!
But That’s Not All…
Silver prices also zoom higher during this seasonally bullish period and even tend to outperform gold, as you can see below.
Silver has outshined gold by a wide margin, gaining close to 10% during the first seasonal strong period from December–February over the past two decades. And following a brief spring pullback, silver consistently moves higher again in the second half of the year.
Bottom line: Seasonality is just another of the many reasons why gold, silver and precious metals stocks should soon resume a strong uptrend.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch