Bank of America: S&P 500 Faces Weakest Quarter in August-October, Gold and Bonds May Benefit

According to Bank of America Securities analyst Paul Ciana on July 27, August through October typically represents the weakest rolling three-month period for the S&P 500, with historical average returns near zero (-0.02%) and only a 55% probability of positive returns since 1928. The period also shows the largest average drawdown of all rolling three-month cycles at 7.35%.

During this window, Bank of America expects defensive assets including gold, U.S. Treasury bonds, and the U.S. dollar to perform relatively well. Gold has posted gains in 61% of August-October periods since 1992 with an average gain of 2.52%, while 30-year Treasury yields historically tend to decline.