Gold/silver/platinum: bullish seasonal strategy starts Monday
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
It was a mixed week in precious metals, with a few key takeaways in my notebook. As of the week, Gold gained 1%, Silver 2%, and Platinum lost 2.3%, while the expected number of interest rate hikes from the Fed in 2022 is now standing at 7.5! That pushes the Dollar back up near 22-month highs, and typically the rising Dollar acts as a headwind; however, the 30-day Gold/Dollar correlation stands at +78%. Back to the Fed, I believe that the markets are pricing in far too many hikes and that they are on the verge of making a grave policy mistake. They might get a few hikes in, but the problem is that they are tightening into a significant economic slowdown. The U.K. (which our economy often reflects) cut its 2022 GDP forecast from 6% to 3.8% this week, and I think we will be doing the same, so stay tuned.
Platinum year-by-year- seasonal chart
Many of our clients often ask us about a particular market's technical or fundamental analysis, but something that they overlook is the seasonality.
The diagram above shows the seasonal trend for Platinum that has played out for 13 of the last 15 years. We have recently partnered with MRCI, which specializes in analyzing seasonal trends. Each month we provide approximately 30 monthly historical trading strategies for individual commodities, and commodity spreads from various major commodity markets - all at least 80% historically reliable with specific entry/exit dates. You can register for a free two-week trial of Seasonal Trends here: Get Seasonal Trends.
Daily Gold Chart
Gold has done an excellent job fending off a higher dollar, yields, and complacency in geopolitics. Constructively after reversing nearly $200/oz from the new contract high, Gold has found its footing with a significantly higher low on the charts. That pushes up our new major three-star supports at 1931.7-1938.5 in Gold and 25.19-25.25 in Silver. For those of you following us, we will be raising our buy points to those levels with the mini and micro contracts. Remember that Gold historically has bottomed after the first rate hike, and we believe this time is no different. To learn more, we completed a new educational guide that answers all your questions on how to transfer your current investing skills into trading "real assets," such as the 10 oz Gold futures contract. You can request yours here: Trade Metals, Transition your Experience Book.