The statement in the title of
this article is not meant to make a forecast or any forward looking
statement. The point is that, based on seasonality, June is
traditionally the weakest month of the year.
The two charts show seasonlity of the gold price and silver price over the last 30 years. Dimitri Speck is the author of the charts (courtesy of SeasonalCharts). His analysis is based on 30 years of data.
The gold price, according to
the seasonal pattern, is likely to hit the year’s bottom in the weeks
ahead. Chances are high that a rally will ensue in the months ahead.
Silver has a similar seasonal pattern till June. As of July, however, the rally has not been as strong as in gold.
Interestingly, the authors at GoldCore looked
at past year’s performance in gold and silver. The above-mentioned
charts cover 2012 but not 2013. GoldCore writes: “Gold saw massive
concentrated selling in April and further weakness in May – from
$1,476/oz to $1,386/oz. Then June saw gold fall again, from $1,386/oz to
the $1,200/oz level at the end of June which marked the end of the 2nd
quarter, 2013. Gold then bounced sharply in July and August prior to
giving up some of those gains in September, trading sideways in October
and then trading lower in November and December prior to the what
appears to be the second bottom – exactly at year end 2013.”
So the seasonal pattern has held last year. Based on the May closing of this year, it looks like gold and silver in 2014 will be no exception.
Furthermore, interesting to
note is that Dimitri Speck also measured the volatility over a time span
of 37 years. If past is prologue, than we can expect a higher
volatility in June when compared to the last few weeks. See
following charts from SeasonalCharts.com.
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