A golden moment to profit from precious metals: BTIG By Investing.com

Investing.com — Analysts at BTIG said in a note on Thursday that investors should consider taking profits in precious metals, particularly gold and silver, after strong gains earlier in the year.

While they remain bullish on precious metals over the next 6-12 months, BTIG notes that current market conditions present a tactical opportunity to sell and potentially buy back these assets during a pullback.

Gold is up about 29% year-to-date, while silver is up 34%, making it an ideal time to lock in profits, according to BTIG.

“We believe we are at one of these inflection points despite their constructive momentum and trends,” BTIG said in their note.

They added that the daily charts show signs of “exhaustion to the upside” and the weekly chart indicates “negative momentum divergence into overbought territory.”

Historically, October has been a weak month for gold, with an average decline of 0.32% over the past 25 years.

BTIG also noted that gold and real (inverse) rates have traded closely in recent months.

However, they acknowledge that since the last FOMC meeting, real 10-year Treasury rates have risen from 1.55% to 1.60%, even as gold has risen by about $100. This divergence is another factor that leads BTIG to recommend profit taking.

BTIG suggests that a pullback in gold prices could present a more attractive re-entry point, particularly if the SPDR Gold Shares ETF (NYSE: ) falls into the 225-234 range, representing a 5-8% pullback.

For silver, BTIG noted that it has yet to break the May highs and anticipates a decline in October, after which investors may consider adding to their positions ahead of a more significant breakout.