August could be a 'terrific' month for gold, says Jim Cramer

Why August Could be 'Terrific' Month for Gold

Gold last traded at $1,764 an ounce. Silver at $24.36 an ounce.

NEWS SUMMARY: Precious metal prices dipped Friday as upbeat jobs data boosted the dollar. U.S. stocks rose after the July jobs report came in better than economists projected.

Kitco--"The last month of the summer is looking 'terrific' for gold and 'tough' for the S&P 500, said CNBC's Jim Cramer.

'The charts, as interpreted by the legendary Larry Williams, suggest that August could be a tough month for the S&P 500, but a terrific month for gold,' Cramer said Monday. 'Given the big picture backdrop right now, that wouldn't surprise me one bit.'

And it is the seasonality which makes all the difference, the 'Mad Money' host explained. 'Williams is long gold for precisely the same reason he's worried about the S&P: The seasonal pattern,' Cramer said.

One thing Cramer pointed to is the build-up of the debt ceiling worries that come after the two-year suspension of the debt ceiling expired at the end of July. 'Remember, during the original debt ceiling debacle a decade ago, the stock market broke down and ... gold did great,' Cramer noted....

On top of that, gold is currently undervalued in comparison to Treasury bonds. 'Not only does the precious metal have a powerful seasonal trend on its side ... but it's extremely undervalued versus the bonds,' Cramer said, citing Williams' analysis."