This page has been archived and commenting is disabled.

Gold’s Sweet Spot - Strongest Months Are August, September, November And January

GoldCore's picture




 

Today’s AM fix was USD 1,284.50, EUR 959.16 and GBP 762.99  per ounce.
Yesterday’s AM fix was USD 1,295.00, EUR   966.92 and GBP 767.36  per ounce.

Gold fell $14.60 or 1.13% yesterday to $1,282.10/oz and silver slipped $0.25 or 1.21% to $20.37/oz.


 

 

 

 

 

 

 

 

 

Seasonal Gold - Gold’s Strongest Months Are August, September, November

Palladium was the only one of the major precious metals to rise in July, climbing 3.2% for its sixth month of gains. Platinum was down 1.8%, silver down 3% and gold down 3.4%.

Silver for immediate delivery was little-changed in London at $20.40 an ounce.  Platinum fell marginally and was at $1,463/oz. Palladium was marginally lower at $871/oz and remains near the 13 year nominal high of $889.75/oz.


 

 

 

 

 

 

 

 

Gold In U.S. Dollars - 10 Years

Gold is marginally higher in London this morning and overnight in Singapore, goldremained in a tight range between $1,280/oz and $1,285/oz. With Asian trade limited to a narrow band of just $5.00, volumes traded in late trade on Globex were low at just 9,000 lots (GCZ4).

Futures trading volume in London declined and was 31% below the average of the last 100 days. Traders are waiting for the non farm payrolls data later today.

The jobs number is expected to be good after the positive surprise that was the GDP number. The GDP number has rightly been questioned as the growth in inventories contributed 1.66% and likely greatly exaggerated the strength of the U.S. economy in the 2nd quarter.

Markets are jittery and global stock markets are seeing losses with all U.S. indices down yesterday and Asian and European indices down today. Economic and trade war with Russia, conflict in the Middle East and the risk of contagion in Portugal and from Argentina’s default are weighing.

Institutional money is being allocated to gold again as seen in the ETF numbers.Gold ETFs saw their largest monthly inflow in July since December 2012, according to Reuters data, having added 7.4 tonnes to their holdings. Gold ETP holdings hit a four-year low in mid June at 1,491 tonnes, but have since seen some inflows.

Premiums for gold bars in India remain near recent lows due to weak domestic demand. The premium on Wednesday fell to $5-$6 per troy ounce compared with $10 per troy ounce during the last week.

Gold prices have been in lockdown in a range bound month. The spread between July's high and low was just $57.54. This is the narrowest in seven years - the June 2007 range was $54.70. This was right before the global financial crisis.

In 2007, gold began to move up aggressively in September (see chart above). On September 1, it was trading at $672/oz. By early March 2008, it was over $1,000/oz - for a gain of nearly 50% of just 7 months.

Were gold to replicate the gains seen in that period in the coming months, gold would trade over $1,900 and close to new record nominal highs by the 2nd quarter of 2015. The real record high, adjusted for inflation, is of course $2,400/oz. We continue to believe it will be reached before 2020.

Global Conflict and Currency Wars a Threat to Economies and People 
The New Cold War risks devolving into actual conflict between Russia and Western powers. We are in the early stages of trade, economic and currency wars. Competitive currency devaluations were a precursor to World War II and actual conflict is a real risk now. Complacency is rife among financial advisers, brokers and bankers and the public is being lulled into a false sense of security ... again.

It remains prudent to hope for the best but be prepared for less benign scenarios.

Gold’s Strongest Months Are August, September, November And January
The summer months frequently see seasonal weakness as has been the case in recent years and since gold became a traded market in 1971. Gold and silver often see periods of weakness in the summer doldrum months of May, June and July.

 

 

 

 

 

 

Gold Seasonal - Monthly Performance and Average (10 Years)

Gold’s traditional period of strength is from early August into the autumn and early winter. Thus, early August is generally a good time to buy after the seasonal dip.

Today, we commence August trading and August along with September and November, are some of the best months to own gold. This is seen in the charts showing gold’s monthly performance over different time frames - 1975 to 2011, 2000 to 2011 and the Bloomberg Gold Seasonality table above from 2003 to 2013.

 

 

 

 

 

 

 

 

 

 

Late summer, autumn and early New Year are the seasonally strong periods for the gold market due to robust physical demand internationally. This is the case especially in Asia for weddings and festivals and into year end and for Chinese New Year when voracious China stocks up on gold.

Gold’s weakest months since 1975 have been June and July  (see tables). Buying gold in early August has been a good trade for most of the last 34 years and especially in the last nine years, averaging a gain of nearly 13% in just six months after the summer low.

 

 

 

 

 

 

 

 

 

 

 

 

Thackray's 2011 Investor's Guide notes that the optimal period to own gold bullion is from July 12 to October 9. In the previous 25 years, gold bullion has outperformed the S&P 500 Index by 4.7%.

Conclusion
Gold’s ‘summer doldrums’ period is coming to a close. Traditionally seasonal factors often result in weakness in the precious metal markets, particularly in June and July creating an attractive buying opportunity.

The data is compelling but it is important to realise that the seasonal data is just another indicator. Gold’s recent weakness could continue in the coming months. Therefore, short term speculation should be avoided in favour of long term investment diversification.

Investors should, as ever, avoid attempting to time the market and consider cost averaging their purchases. This way they protect themselves from market falls and also from buying again at much higher prices.

Absolutely nothing has changed regarding the fundamentals driving the gold market. We are confident that gold, and particularly silver, are still in long term secular bull markets likely for a 15 to 20 year duration.

Owning physical coins and or bars in your possession and owning physical gold and silver in allocated and most importantly in segregated accounts will continue to protect and grow wealth in the coming years.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 08/03/2014 - 19:22 | 5041867 f16hoser
f16hoser's picture

I hate articles like this. Everytime someone says PM's are set to rise the manipulaters take free money and drive the price lower. All this does is create frustration while making the PM Stackers look like fools. Quit playing into their hands. Keep stacking. Get others to stack. And STFU! The game will end when "They" say it ends. Stackers sound like Dumb Asses everytime they predict the world is gonna end and Gold is headed to $10,000/Oz. I believe it will but no one can predict when. Unless you're in the Cartel?

Sun, 08/03/2014 - 20:06 | 5042022 quasimodo
quasimodo's picture

Amen. 

Sad part is I was one of those that believed guys like Lindsey Williams back when he was talking about this "inside source" oil tycoon and that guys deathbed confession. What a fucking tool I was, have wised up a lot the last five years. 

WTF is the point of all these "too da moon! bitches!" posts and articles.....other than to get more tools to buy a subscription.

A guy is better off just going about his/her business, the world will end when it ends. It didn't back in '08 and it won't tomorrow, unless it does. I for one am not going to stand by and just watch it happen, but I won't be hiding in a bunker either.

Sun, 08/03/2014 - 17:44 | 5041553 Bossman1967
Bossman1967's picture

This from a Bloomberg article:
Money managers cut their net-long position by 10 percent in the week through July 29, the most since June, U.S. government data show. Prices dropped for a third week, the longest slide since July 2013. The decline helped to erase almost $610 million from the value of exchange-traded products backed by
Who the hell is selling that much but then I read its thier paper bullshit. So much for the increase but now is time to buy not sell

Sun, 08/03/2014 - 16:37 | 5041355 messymerry
messymerry's picture

Gold is not manipulated. 

Look at the chart. 

Gold has not been wilfully flatlined for the last two years. 

Gold is not maniipulated. 

The market is free. 

We are free. 

A pig flew over my house while I was mowing the lawn. 

I'm going to go now and have a cup of tea. 

Alas, all is well with the world... 

Sun, 08/03/2014 - 14:34 | 5040922 KingdomKum
KingdomKum's picture

we few,  we happy few,  we band of silver holders  .  .  .

Sun, 08/03/2014 - 17:49 | 5041561 quasimodo
quasimodo's picture

It would appear that at least one is not happy

Sun, 08/03/2014 - 14:15 | 5040850 Tall Tom
Tall Tom's picture

Yes. Gold Prices are set to increase. This is unfortunate if you are in a buying mode. Who wants to pay more for something than they have to. Gold Buyers seek declining prices.

 

However this is a good opportunity for Gold Sellers as selling into the increases tend to make the most bang for your trade...if you still value Fiat Currency.

 

Personally I want Gold Prices to decline as I seek to buy.

 

But it is not about what I want.

Sun, 08/03/2014 - 17:20 | 5041486 Bossman1967
Bossman1967's picture

Nope its what the fed wants and I beieve that your buying opportunity will be just fine as wine. They are not ready yet. So buy on. As i have been for the last 2years

Sun, 08/03/2014 - 15:23 | 5041090 jarana
jarana's picture

Many people I respect over there seem to agree that if monetary nature (not commodity nature) of gold turns to arise... no matter if you only hoard 2 ounces, and no matter at what "price" you got them... You'll be fine.

 

Don't be confused making your hoarding plans. Make your plans assuming only commodity nature is going to arise in the short-mid term (i.e. looking at gold-oil ratios, or those kind of things); if gold money nature "wakes up"... it's almost incalculable.

 

Same for silver, I think.

Do NOT follow this link or you will be banned from the site!