Gold Prices in September

Gold Price Predictions for September 2024

The month of August is seasonally the second-best month of the year for gold prices, trailing only January in average returns since 2000. This year, the month didn't disappoint as the gold price rallied $56 or about 2.3%. However, the month of September has recently proven to be a lousy month for gold prices, so we'd better hold and be ready for some volatility in the weeks ahead.

Over the weekend, I found this link on X: https://www.mining.com/web/will-golds-tailwinds-be-enough-to-overcome-september-curse/ 

From that article are these two charts:

Keep in mind a couple of things. First of all, that's just the last seven years, so it's not a large sample size, and prior to 2017, gold had a rather positive history with the month of September. However, those charts certainly do serve as a stark warning to be a little more cautious than you might have been last month.

Factors Affecting Gold Prices in September 2024

So, what might be some events to monitor as the month progresses? What might send the gold price reeling in the short term?

Let's start with the economic calendar. This upcoming week will bring an almost-daily barrage of headlines and datapoints that will move the markets:

• Wednesday, Sept. 5 - the JOLTS labor market data.
• Thursday, Sept. 6 - the latest service sector PMIs.
• Friday, Sept. 7 - another U.S. jobs report.

But we're not done there. Later to come this month will be...

• Wednesday, the 11th - the latest Consumer Price Index.
• Thursday, the 12th - the latest Producer Price Index.
• Tuesday, the 17th - the latest on Retail Sales.

Gold Market Outlook and Investment Strategy for September 2024

ALL of that hits the wires before Chairman Powell once again convenes the FOMC on the 17th and 18th. Once the meeting ends, it's fully expected that the Fed will announce a 25 basis point cut to the fed funds rate. At present, the fed funds futures market is pricing in as many as three 25 basis point cuts this year—at the meetings of September, November, and December. But what if Powell intimates that only two cuts are in the pipeline? What happens to the gold price if that happens?

Further, what if the Summary of Economic Projections that is issued at the conclusion of the FOMC meeting projects even fewer rate cuts than currently expected for 2025? Can you envision a scenario where the dollar index rallies while bonds sell off, leading to higher long-term interest rates? If that happens, it will be very difficult for the gold price to rally.

And then there's this: As you can see below, the gold price has now rallied for six consecutive months. Look closely and count the green candles for yourself. Since gold is unlikely to continue rallying indefinitely, it's logical to assume that the winning streak will be broken at some point. Maybe here in September?

None of this means that gold can't rally this month. Perhaps it will. Any of those economic datapoints listed above could come in below "expectations", and what if almost all of them do and Powell surprises everyone with a 50 basis point cut instead of 25? That's certainly possible. And, of course, we still have a myriad of geopolitical concerns that can provide a safe haven bid.

Additionally, prior to 2017 the month of September was often a good one for the gold price. I searched Google and found the chart below. Maybe it's time we buck the current trend and go back to the way things used to be? Maybe.

For now, though, I think I'll stand aside and take a more neutral short-term posture. I'm going to have some fiat cash to spend on physical gold this month, and if price comes in a little, I might be able to save a few bucks. Once September is over, though, I think we can expect one more price rally into year-end with new 2024 highs coming sometime later this autumn.

Key Takeaways for Investing in Precious Metals

Don't miss out on the potential opportunities in the gold and silver markets this September. Secure your investments now and take advantage of potential gains as the market unfolds. Start investing in gold and silver today!