Gavin Wendt

While gold has posted an impressive gain of 21% this year already, it has done so in what is traditionally a seasonally-weak period of the year for the metal. The only losing months this year thus far have been March and May, which was to be expected - with these being the two weakest months for the past 40 years. The fact that gold has posted such a strong first half, sets it up for a very strong finish to 2016. The average second-half performance since 1975 is 5.2%, compared to 1.2% during the first half of the year. As we've discussed previously, upside elements for gold are strong - driven by uncertain outcomes relating to the experiment of zero or negative interest rates by central banks around the world, the postponement of any prospective US rate rise, and a continuation of 'accommodative' monetary policy by central banks. Throw in growing retail investor demand in the face of uncertainty and low yields and you end up with a very positive picture for both gold and silver.


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