Gold and silver are up 9.3% and 19% respectively so far this year – thereby outperforming many asset classes again in 2012.
In time, 2012 may be seen as a year of correction and consolidation for the precious metals after the sharp gains and record nominal highs seen in 2011.
As Dimitri Speck’s excellent ‘Silver Seasonal 30 Year Chart’ shows silver over the long term has a clear seasonally strong period from mid December through to the end of April.
Indeed, Bloomberg’s ‘Seasonality Chart’ for silver shows that in the shorter term there are also seasonal factors to consider. In the last 5 and 10 years, the best month to own silver has been February with gains of 9.5% over the 5 year period and 6.4% over the 10 year period.
The months with the next best performance are November, January and April (see 5 and 10 year average returns in chart). Over the long term March is a good month to own silver and this can be seen in the 3.2% 10 year average return.
This shows that the optimal time periods to own silver are from the end of June through to May.
June is a wicked month to own silver with hefty losses of 5.5% and 5.3% over the 5 year and 10 year period. August is a weak month and September mediocre.
While silver has clear seasonality, one should not use it as a trading bible - it is merely a guide.
This is clearly seen in the fact that while February is silver’s best month, silver fell 5% in February 2003 which could have wiped out someone trading silver with leverage.
Silver’s seasonality is clear and can help us to decide on when to buy or add to allocations and indeed when to sell or reduce allocations.
The positive seasonals and silver being close to its long term daily moving averages after the massive period of consolidation of the last 21 months means that the short term cyclical and technical prospects for silver look very positive.
WEBINAR: OUTLOOK FOR SILVER IN 2013 AND HOW TO OWN SILVER SAFELY
Join David Morgan, publisher of the Morgan Report and a recognised expert and global authority on silver and Mark O’Byrne, Head of Research and Founder at GoldCore.
In this 60-minute webinar, discover:
• Outlook for Silver in 2013 and Coming Years
• Silver Seasonality - When To Buy
• Safest Way To Own Silver
Join us for a webinar on 12/12/12 at 1900 GMT.