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Silver's Seasonal: Kicking into high gear

Commentaries & Views

Eight days into the new year, and we are off to an explosive start! One bitcoin is worth both of my cars, and interest rates are blasting off. Seriously, what could go wrong? The answer is nothing. Some of our clients have six-figure gains on bitcoin futures, and others have been short treasuries and caught the move on rising interest rates. I have been writing that interest rates will continue to increase until the second quarter of 2021, and at that point, you want to shift into gold. That is the point in the economic cycle where data has peaked, and the rate of change has stalled. 

If you know me personally or are a client, one thing you will get is a straight answer and someone who does their research. The research I enjoy most is backtesting how various asset classes perform under different economic models and at different rates of change. I will tell you that gold is not an asset that "outperforms" others in this current environment, and if rates are rising, the price of gold is declining, and energy costs are rising, gold miners will "underperform." Remember, my goal is to give you the best article I can write given the information I have when I write it. 

Over the past month, I have laid out some of our "2021 high conviction trades," and since that time, favorable market directions have allowed us to close many of them already, leaving clients with excess cash to deploy.

This upcoming week, we will enter into several new ideas in different commodities i.e., sugar, and design a play to take advantage of the seasonal bottom in silver using call options.

Seasonal Chart of Silver

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.