The conventional wisdom in the gold sector is that the fall is usually good for gold prices. This makes some sense. There’s the Indian wedding season in the fall, which creates a lot of buying. There’s the usual parade of exploration results from Northern Hemisphere explorers creating excitement. There’s the end of plain old “sell in May” summer doldrums. And the data do show an uptick in the fall on average.
I published this chart earlier this year, arguing that if gold did break out as I thought it might, the “PDAC Curse” wouldn’t hold this year. I was right.
But the thing I want to draw your attention to is that over the last 18 years, October has not, on average, been a good month for gold. The same is true if we look at the data during the bull run from 2001 up to 2011, or the more bearish period since then.
Now, with all the chaos on the global stage today, I’m not betting that this month will see lower gold prices. Some of the political and economic trends in full swing now have just shown that they can kick gold up significantly the moment some relevant story hits the wires.
On the other paw, other things being equal, the data say that the odds favor some correction this month. That’s a very good thing for those of us with shopping lists.
My point today is simple. The significant potential October weakness in gold and silver prices has clear tactical implications:
That’s my take,
Friday, October 4, 10:08am, EST, 2019