Owning Gold in September Could Prove to be Very Profitable

5:40 AM

September 2, 2016 -- Two trading days in, it’s still way too early to draw any conclusions about what the rest of the month has in store for metals markets. But seasonal factors tend to add upside pressure to the gold market in September. In fact, since 1975, September has produced bigger average monthly gains for gold than any other month. January comes in second, while October tends to be the third strongest month for gold. So owning precious metals markets from September through January tends to be a profitable trade.

Meanwhile, odds still favor the Fed punting on interest rate hikes at least until December. Earlier this year, Fed officials had indicated they would raise rates MULTIPLE times in 2016. But lackluster economic data and the persistence of negative interest rates abroad have dissuaded the Fed from following through on a single rate hike.

That fact that the Fed’s benchmark Federal funds rate is now just a quarter point over zero means that if a recession were to hit, the Fed would have few options for stimulus other than to go negative on rates. Something that is being actively discussed as a possibility.

Live prices at MoneyMetals.com show gold currently trading at $1,327.00 per ounce on the global market, and silver is coming in at $19.25.

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