Gold is having a solid month.<\/p>\n
The precious metal fell slightly on Monday after notching its third straight weekly gain as investors flocked back to the safe-haven asset amid concerns around the global economic recovery.<\/p>\n
Gold prices are up nearly 2% in the last three weeks, hovering around $1,800 on Monday.<\/p>\n
Gold is entering a seasonally strong period, Newton Advisors President and founder Mark Newton told CNBC's "Trading Nation" on Friday.<\/p>\n
Typically, the metal bottoms in June or July, then moves sharply higher by early fall, Newton said.<\/p>\n
Though higher interest rates and a stronger dollar could cap gold's gains, a move above $1,855 would fuel another leg higher, he said.<\/p>\n
Conversely, "under 1750, we could actually have a pullback into late July near March lows. That should be an excellent time to buy gold," he said.<\/p>\n
The Commodity Futures Trading Commission's Commitments of Traders report for gold also hasn't reached extremes quite yet, indicating that investors could still get a chance to buy in, Newton said.<\/p>\n
"If we had a final flush in gold, that would certainly get us to the area where I think we could really be confident in longs," he said. "So we're getting there, but I think seasonality should serve as a tailwind for us in the months ahead."<\/p>\n
Newton suggested playing the move with gold-based exchange-traded funds such as the SPDR Gold Trust (GLD), the iShares Gold Trust (IAU) or the VanEck Vectors Gold Miners ETF (GDX).<\/p>\n
Another market analyst wasn't as optimistic about gold's prospects.<\/p>\n
The narrative that growth and inflation will return to pre-pandemic levels feels early to call, said Steve Chiavarone, a portfolio manager, equity strategist and vice president at Federated Hermes.<\/p>\n
"We just simply don't agree," Chiavarone said in the same "Trading Nation" interview. "We think they're going to settle into a higher range, a range of more than 2% growth, more than 2% inflation [and] therefore more than 2% yields."<\/p>\n
That tends to cultivate interest in more value-oriented investments at the expense of safe-haven assets such as gold, Chiavarone said.<\/p>\n
"Seasonality issues notwithstanding, that's really the driver to get people away from safe-haven trades like Treasurys and gold back into much more cyclical and inflation hedge plays, more like cyclical value and other kind of industrial commodities," he said. "We're fading this."<\/p>\n