Gold and silver enter the second half of the year while in the midst of a technical shorter-term downtrend, having pulled back from recent highs.
Gold actually flirted with its all-time high back in May, the third time it’s reached the $2,050 level. Triple tops are generally unheard of, implying gold could simply be resting before finally powering through that level to reach new highs above $2,100 later this year.
But a big move starting this summer isn’t likely, absent an exogenous event. Although not a hard-and-fast rule, seasonal factors typically point to summer doldrums.
The forces that move gold and silver prices are of both a fundamental and technical nature. The fundamental factors drive gold prices and silver prices in the longer term, while technical factors play a more important role over the shorter term.
If there are strong indications that silver and gold are going to move higher or lower, seasonality is not likely to change it. However, based on the market action we’re seeing, we currently expect the precious metals to trade mostly sideways until late August.
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