As a companion update to yesterday’s look at the GDX seasonal (on average, positive in December since 2015) let’s also look at the gold and silver seasonals, along with public optimism in GDX.
First, a qualifier. Sentimentrader continues to show the risk in gold as very high. I don’t know where they get those numbers from. Perhaps commercial hedging activity, which is still high for gold and silver. But the public optimism (OPTIX) for GLD and SLV is quite muted. Even slanted toward contrary bullish. FYI.
All due caveats about the seasonals. They are an average and a guide from one analytical perspective, and far from a sure thing.
Gold’s seasonal average turns up now. Like, right this minute, and it stays up into February.
Silver’s seasonal chops into year-end and then turns up hard into February.
According to Sentimentrader’s data, GDX is seeing very depressed (but not extreme) sentiment, a contrary positive when combined with the seasonals.
Just a few more factors for you to consider during FOMC week. There should be a lot of energy in the precious metals market this month. Energy that can cut both ways. But seasonal and sentiment are instructing bullish and neutral to constructive, respectively. Again, I am not sure what is driving the high risk reading in gold, but other aspects of the PM complex at least show significant improvement upon the previously over-bullish situation.
