Historically, October has been gold’s worst month and June is a close second.
Although the historic summit between President Trump and North Korea leader Kim Jong Un captured the headlines today, the Fed also began a two-day meeting. Latest data from CME Group’s FedWatch Tool indicates a 95.0% probability that the Fed will increase rates tomorrow by 0.25% to a new range of 1.75% to 2.00%. Generally, the higher interest rates go, the less desirable gold can become. Gold (NYSEARCA:GLD) does not have a yield and typically storage of physical gold has a cost. However, any weakness in gold in June could prove to be a good buying opportunity for a short-term trade.
In the above chart, gold’s monthly performance from 1975 to 2017 is displayed. Historically, October has been gold’s worst month and June is a close second. However, after weakness in June, gold has, on average, enjoyed solid average, historical gains in July, August and September. Some of this strength in gold is likely due to safe haven demand during the stock market’s worst two months, August and September.