Gold Silver Worlds: There are some opposing forces at work for the short term outlook of gold.
First, the gold price tends to rise strongly in September, at least from a seasonality point of view. The chart below shows the gold price seasonality at work over 30 years. It shows generally a spike higher. Chart courtesy: Seasonalcharts.com. Furthermore, a military attack on Syria could initially send the gold price higher. As we wrote earlier, a comparison with previous military or terrorist attacks resulted in a rise of gold right before and after the event, but that effect evaporated one or two months later.
On the other hand, there are several key events upcoming in September which could potentially (!) generate downward pressure on gold. The following events were cited by Bank of America and published by Zerohedge:
- FOMC meeting on September 18th: The long expected meeting with press conference will be key in terms of confirmation of tapering. Moreover, an indication of the target interest rate for 2016 could be communicated. Both have the potential to impact the gold price.
- New Fed chair and FOMC composition: It is clear that the two candidates have a different view on monetary stimulus (Summers is not in favor of QE while Yellen is more in favor of QE). The decision of the new chairman and its board members will undoubtedly move the gold price.
- Fiscal deadlines in the US on 30/09 and 15/10. The Bank of America does not expect the same “chaos” as in August 2011 though, hence not a big mover for bonds and gold.
- European risks may resurface with primarily the upcoming German elections and Greek October review.
In terms of chart analysis, it is clear that the metals don’t have a solid base yet for a significant move higher, no matter how bullish some expectations are long term and how hard some bulls are yelling in the online communities. The facts are what they are.(...)Click here to continue reading the original ETFDailyNews.com article: What To Expect From Gold In September?You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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