On May 10th in NFTRH 602 we reviewed the sentiment and seasonality of gold and silver. At that time gold’s public optimism was elevated as casino patrons still had not accepted the risk ‘on’ trades as they appear to be FOMO’ing to do presently.
Gold’s seasonal started the year well enough on average but then got really whacked out, with the net result being a metal ahead of schedule to its bull case. 2020 thy name is volatility and extremes. With all due caveats about seasonals being unreliable on any given year, the average holds that it does not really get going until mid-late summer.
Silver on the other hand was struggling to find fans back on the 10th. So it is not surprising that silver rallied hard. The downside is that today’s version of this graph is not as nice from a contrarian’s point of view. It’s not yet extreme, but it’s nearing the red line.
The silver seasonal is behind schedule, unlike its more buttoned down dad above. But silver tends to bottom in the summer. I think this year’s downward volatility has already seen to that (the low). But the seasonal may anticipate a secondary low or some support testing if it does what it usually does in deep summer. The averages hold a short-term level of caution not only on silver, but gold and the miners into June. Recall last year the whole sector, gold, silver and HUI bottomed in late May.
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