This Summer Could Bring Seasonal Gold Buying Opportunities

Market physics would eventually weigh down on gold as the precious metal has been unexpectedly rallying for much of the year. Despite prices heading lower, the start of summer could bring seasonal gold buying if history repeats itself.

Gold prices year-to-date are up about 12%, essentially mirroring the rally in the S&P 500 though the latter may have more room to run if interest rate cuts allow for an equities surge. The path to more gains may not be as certain when it comes to the precious metals, but the dog days of summer could allow for investors to buy in, especially if they're looking to diversify their portfolios.

"With traders’ attention normally diverted to vacations and summer fun, interest in and demand for precious metals usually wane," reported. "Without outsized investment demand, gold tends to drift sideways to lower dragging silver and miners’ stocks with it. Long feared as the summer doldrums, they can offer good buying opportunities."

There are a couple of tailwinds that could allow for a summer rally. China demand and continued buying from central banks could keep gold prices afloat, but if investors want to buy into the dip, June is an opportune time given its historical price pattern.

"If those trends continue, gold could enjoy a strong summer 2024," noted further. "On average during these 20 modern bull years, gold’s summer-doldrums low is actually carved in mid-June. June is the worst of the summer doldrums, averaging 0.3% losses. But buying picks up again in July and August, which have averaged nice 1.2% and 1.6% gains."