The outlook for the price of gold and silver continues to remain choppy over the next several months. Several factors are influencing the outlook.
- Seasonal factors: Historically, the price of gold and silver tends to flatten out over the summer months and regain strength in the fall when India’s festival/wedding season begins. India is the world’s second largest consumer of gold bullion.
- A pause to digest gains: Let’s face it. Gold and silver have had a very good run over the last four months. This is good news for everyone who is invested in, and is accumulating gold and silver. But nothing ever goes straight up, and recent dollar strength has become a headwind for further gains in the short term.
The wild card is increasing geopolitical tensions. Should tensions remain at a high level or continue to grow, it is possible this pause may be more of a sideways price action in a narrow range rather than a $50 to $100 pullback to test significant support levels.
Of course, if the geopolitical situation begins to spiral toward full blown conflict between the US and North Korea, seasonal factors and dollar strength will not matter and a sustained move upward could commence.
The world we live in today is what gold was made for:
- Portfolio insurance
- A hedge against geopolitical tensions
- Protection from financial system instability
- A historically safe long term store of value
These are the reasons to keep stacking your gold and silver. While the short term outlook may be choppy, the long term outlook continues to improve as more people realize that the financial and geopolitical problems that have recently become more evident do not have easy or quick solutions.