Giles Coghlan LLB, Lth, MA
Financial Source
Fundamentally, precious metals could be set for gains heading into Q1 of next year. Inflation remains pressured to the upside and this is keeping real yields lower which helps both gold and silver. The Federal Reserve doesn’t look like raising rates until at least the middle of next year. This scenario has helped support a weaker USD and falling real yields which is typically a tailwind for precious metals.
Silver also has some strong seasonals heading into Q1 next year. Over the last 25 years, silver has risen 18 times between November 15 and February 28. The average gain has been +8.60%. The largest gain was +39.87% in 2008. The largest loss was -13.07% in 2012. There is never any guarantee that this seasonal pattern will repeat again this year. However, it is very helpful to notice when these strong seasonal patterns are in place.
Major Trade Risks: The main risk to this seasonal pattern would be if there is some very hawkish monetary policy decision at the next FOMC policy meeting in December or/and if inflation expectations fell.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks
EUR/USD regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.