Gold And Silver Prices Enter Weak Month According To Seasonality

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 seasonality 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.

gold_seasonals_30_years

gold price seasonal

Silver has a similar seasonal pattern till June. As of July, however, the rally has not been as strong as in gold.

silver_seasonals_30_years

silver price seasonal

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.

gold_volatility_seasonal_37_years

gold price volatility

silver_volatility_seasonal_37_years

silver price volatility

 

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