In any asset class, timing the market can be a difficult, but cyclical patterns can offer valuable information when creating investment strategies. In the case of silver, seasonal patterns could be beneficial.
Gold has been receiving most of the fanfare, but silver isn’t too far behind its precious metal peer, rising about 10% for the year. Investors hesitant on buying too high may want to look at certain months for an ideal buy-in opportunity.
“Silver, like many other commodities, exhibits seasonal patterns that investors can use to inform their investment strategies,” InvestingHaven noted in a blog post, which was also covered by Kitco News. “By analyzing historical data, we can identify recurring trends that help predict silver market movements.”
That analysis included price patterns in the long-term horizon as well as short-term moves within the last four years. This analysis can be beneficial to both long-term buy-and-hold investors as well as short-term traders looking for an ideal entry/exit point.
“The comparison between these periods reveals shifts in market dynamics and potential opportunities for silver investors,” InvestingHaven said.
“These trends offer a foundational understanding of when silver tends to perform well and when it typically faces headwinds,” they added. “The chart shows a strong upward trend starting from January and peaking around March. This indicates that silver generally experiences positive momentum in the first quarter of the year.”
Timing The Dips
Knowing when prices recede can offer investors an ideal, aforementioned entry point. Or quite simply, employing a strategy that involves buying the dips.
“A sharp decline is observed around June, which marks a period of weakness for silver,” they wrote. “For investors, June might be a time to be cautious, either by holding off on new purchases or by taking profits on earlier positions.”
As Kitco noted, a recovery phase follows and then comes upside through the third quarter.
“After the mid-year dip, silver prices tend to recover, with a notable upward trend from July to September,” the author noted. “This pattern suggests a second opportunity for gains in the market.”
Investors looking to implement a seasonal buy/sell strategy for exposure to the precious metal may want to consider the Sprott Physical Silver Trust (PSLV). The fund provides exposure to the metal without the additional hassle of storing it. It invests in unencumbered and fully allocated London good delivery silver bars. Additionally, shareholders can redeem their shares for physical bullion anywhere in the world (subject to certain minimum conditions) if they want a more tangible investment experience.
For more news, information, and analysis, visit the Gold/Silver/Critical Minerals Channel.
