DMR–Gold listless as we move into the summer doldrums – traditionally the best time of year to buy gold
Gold continued to meander listlessly either side of the $1300 level looking for an incentive to move in one direction or the other. Nothing though seems to materialize of sufficient import to move it off the dime – not even an anti-climactic meeting between the U.S. and North Korea, not even a rancorous G-7 summit meeting, not even the threat of rising inflation, not even the long-term onus of price-elevating trade wars (which I believe we are going to find out are easier to start than to end). . . .So it goes.
Meanwhile, Chris Vermeulen writing for Investing.com today wants us to “Please notice that the recent price lows, originating near the start of 2016 all the way through current price activity, are continually higher. Even the current price rotation, near the right edge of the chart, is still higher than the previous low price rotation near the middle of 2017. Ladies and Gentlemen, we have an uptrend already in place for gold. The ‘rope-a-dope breakout’ that we are suggesting is right around the corner. It’s the potential for a $1370 price break that has been setting up since June 2016.”
It would be even more of a ‘rope-a-dope’ breakout if it launches during the depths of the annual summer doldrums. I distinctly recall the dominant market psychology in the summer of 2009. The financial crisis was in full swing, but gold was stuck in the low 900s and languished there with the usual complaints that it had “lost its luster,” was “no longer a safe haven,” etc etc etc. . . .the usual litany. By the end of August it had moved to the $1000 level – from there it began its ascent to the all-time highs at the $1900 per ounce. As the old saying goes, the best time to buy gold is when everything is quiet.
Note: If you haven’t taken note of our June special offer, it is worth your attention – old Swiss 20 francs priced competitive with contemporary small-sized bullion coins. Typically, it sells at a premium – sometimes a stiff premium – over other historic pre-1933 gold coins. These kinds of offers don’t come along very often and we have already had strong participation. Our last three offers sold out in a matter of days and, as always, it is first-come, first-served.
Quote of the Day
“Early summer is the weakest time of the year seasonally for gold, silver, and their miners’ stocks. With traders’ attention diverted to vacations and summer fun, their precious-metals interest and investment demand wane considerably. Thus this entire sector, and often the markets in general, suffer a seasonal lull this time of year. But these summer doldrums offer the best seasonal buying opportunities of the year.” – Adam Hamilton, Zeal LLC
Chart of the Day
Chart note: The gold price from January, 2016 to present highlighting the trend’s rising lows referenced in today’s market report.