This page has been archived and commenting is disabled.
September Is (Still) The Best Month For Buying Gold!
At Sprout Money we have been advocates of gold for as long as we can remember. In our opinion, every portfolio should have some exposure to the yellow precious metal regardless of the profile of the investor.
It is one of our favorite investment themes and it will remain to be so for a long time…
The reason for that is simple: the gold price has been in a secular bull market since the year 2000. We stick to that view despite the fact that in 2011 gold fell into a cyclical bear market and started crumbling just short of 2,000 dollar per ounce.
Different elements were at the source of gold’s decline:
- First and foremost competition came from the stock market, which has been in a cyclical bull market since 2009 on the back of the financial crisis.
- Secondly, the dollar has been gaining momentum again and makes gold look like a less attractive investment.
- The overall sentiment is a third element that cannot be underestimated, however, and is related to psychological factors and the media.
A majority of participants of the weekly Kitco News Gold Survey indicated that they expect the gold price to decrease, for example. In their opinion, gold will have a tough time dealing with the improving macroeconomic landscape in the US and the looming interest rate increase.
As Kitco states: "Out of 37 participants, 24 responded this week. Of those, five see higher prices, 18 see lower prices and one sees prices trading sideways. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts."
That is all nicely visualized on the infographic below.
It is important to know that most of the participants in these kinds of polls are gold bugs, which makes the result even more clear as a reference to the sentiment surrounding gold.
And then there are the classic ‘short sellers’ in gold, of which one can wonder what their hidden agenda is. Goldman Sachs, for example, stated on CNBC just last week that they are sticking to their original 1,050 USD per ounce price target for the end of the year.
Their commodity specialist gave his usual speech about the fact that safe haven buying because of the crisis in Iraq and Ukraine and the recent quantitative easing in Europe and Japan have supported the gold price a little bit.
According to this analyst the Fed is playing the part of the bad guy here, which is why he advises to short gold. The appetite for short selling is quite noticeable actually, judging by the open interest on the gold markets.
From a contrarian standpoint, that is more a symptom of a market that appears to be bottoming out than of an imminent crash, however. Meanwhile demand from retail investors seems to be stabilizing as well, as demand for gold coins like the Krugerrand or the American Eagle is slowly picking up.
And without anyone taking the time to write about it, physical gold deliveries in Shanghai doubled over the last two months. As with many things: if no one writes about it, you will find the truth at Sprout Money ;-).
The stronger demand for physical gold has the effect, moreover, of increasing the gearing of the shorts on the paper gold market.
Nevertheless, it seems like short sellers have tightened their grip on this market; open interest in gold increased which, in combination with a lower price, confirms that futures are being driven by an increase in short positions. The chart below makes that clear, especially from the 27th of August when the decline started.
This is another indication of the fact that the gold market is bottoming out.
The last thing you want to do now is state that a stronger dollar automatically leads to lower gold prices, because the recent momentum in the dollar has mostly been the consequence of weakness in other currencies; think of the strong decline in the yen as a result of the weaker Japanese economy. The ECB lowered interest rates to practically zero, and the British pound is sweating because of Scotland’s independence campaign.
A more plausible analysis is that the investment community is still not worried about systemic risks in the financial system. The stock and bond markets are still doing very well, although volatility has picked up a bit. The perceived risk has declined.
But in the longer term there are plenty of risks left in the system and demand from growth markets will remain strong as well. Many countries in the Middle East and the Far East are still net buyers of gold; the demand from the central banks of China, Russia, etc. remains strong.
The chart below makes that quite clear!
Russian gold reserves 2011 - 2014 (per ton)
Decreasing exposure to gold in your portfolio therefore does not seem like a smart move at the moment. It would be like cancelling your Florida hurricane insurance in June. Keep gold in your portfolio and profit from this temporary weakness in the yellow precious metal’s price and the sentiment on the market.
Those investors who like to time their purchases probably know already that September is the best month to buy gold as well, as evidenced by the following chart.
Gold has gained 3% on average in the month of September over the last 20 years, far ahead of November (1.8%) in second place.
The interesting part is that this usually is the result of a comeback from weaker circumstances, which is exactly the situation where in right now. Especially the weakness in the price is remarkable.
The coming months are definitely looking up for gold based on seasonal factors in countries like India and China, moreover, and it is most probable that the gold mining sector will capitalize on the revival.
In short, the current weakness in the gold price will once again be considered as a unique buying opportunity in hindsight. Unfortunately not many investors make use of these kinds of opportunities.
>>> Want to Know Where the Gold Price is Headed Long Term?
Sprout Money offers a fresh look at investing. We analyze long lastingcycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies from Sprout Money are transformed into the Gold & Silver Report and the Technology Report.
Follow us on Twitter @SproutMoney
»
- advertisements -
geez.. you're worse than the stock market Whores who can never honestly tell you that "there is a time NOT to be in equities".
This is NOT the time to buy gold.
Gold has A LOT further south to go... possibly as low as $900 an ounce.
Stop lying to people to line your pockets.
Fuck heads like you always know the future with certainty. Yet, somehow with all this advance knowledge you are still a shit eating starbucks barrista, living in mom's basement. Just shut up.
Wankers like you said this last December too but it never went that low. It will not go below that level and I will be buying ALL the time from here on down. Bring on your crash in price. It's a gift.
Gold and silver are good as representatives of wealth in a civilized world.
That being said:
Peices of paper that say that you have gold or silver are worth nothing (except in an abstract way). Physical gold and silver don't really matter if the civilization crumbles. you can't eat it, it won't keep you warm, and while you can wear it (in the form of jewelry), it won't cover your ass when the rain comes and the wind blows.
As a means of trade, it is unweildy to carry around. Tungsten seems to weigh the same as gold does, and therefore gold bars can be counterfeited (and have been); so trade via small merchants for goods and services is not an assured thing when the paper currencies finally fail. Given the trade value of silver, it would take people with the strength of Hercules to carry IT around, so that's pretty much off the table as well. The electric carts that haul the fat people around Walmart have a limited weight capacity...
ONE particular September (in 2001), the PTB apparently saw that Gold and Silver were a good 'value':
http://911justicehalifax.wordpress.com/2012/09/16/wtc-9-11-biggest-gold-...
Of course, they got it via the use of other commodities.
Lead. Brass. Antimony. Gunpowder. Thermate. With a sufficient supply, anyone can have all the gold and silver one wishes.
It kind of brings a new dimension to the term 'Physical Delivery'.
I think the guy's name is Kurt Sonnenberg (the FEMA photographer that took all the pics of ground zero, and later released them as a 'whistleblower' after he realized what he was seeing, showing the empty gold vaults that were UNDAMAGED; their doors standing wide open; in the basements of WTC4 [or 5 or 6]).
YOU can buy an ounce of gold; and I'LL buy the same 'monetary amount' of ammunition. I will bet that I'll have your gold if I want to take it... one way or the other...
You cannot reform the corrupt system by trying to work within the boundaries that the corrupt masters have set.
When one considers the amount central banks hold in reserves and the obvious fact that they want gold, one must be amazed at how little they get.
In truth central banks know, as they saw in 1980, any outright attempt to hoard large amounts of gold will collapse the system. Gold would go to $50,000 and maybe higher.
The country doing this would be blamed for collapsing the current monetary system.
So far all I see is some minor shuffling of a few tons from CB to CB and some apparent use of commodity gold being collected by China and maybe Russia.
There has not been any real effort to convert treasuries to gold...yet.
Naw. Most of the demand for gold is now taken up by paper gold. That is why the price is so suppressed. Any large movements are done quetly behind closed doors at a secrety price.
The Low is in for Silver; you heard it first here.
Well $1227.40 per oz gold down another $4.
If i was selling gold and silver like sprott i'd be telling you the same thing , BUY BUY BUY . But since i'm buying silver and gold i'll be telling you to SELL SELL SELL .
Buy Silver instead; I'm serious. Analise it. Gold attracts the attention of the .Gov and the Big Banks; it's part of their world. Silver isn't. Silver is MORE under-priced than Gold. Silver increases in price more in percentage than Gold does. When the mass mind rolls over and acknowledges the REAL inflation, which is increasing; Silver will increase more than Gold. Why Short change yourself, and paint a target on your back at the same time.
SAT 800;
Here is the thing. If they are producing Silver at $11 per OZ to sell in USA on open Market for $18... then the price of silver steadies out open Market @ $30 per Ounce... I'm thinking more produces jump into market, more old producers ramp up production, and maybe there is more activity in the Scrape Market & in Recycling Silver.
Price Increase = More Competition & more Production which maybe keep the Silver price in check.
Silver Price Increases may not be Linear or Exponential... more likely a curve with gradually decreasing highs.
But I know nothing about the Market or Industry or Producers.
Ella cristo, tikanis. esees ellenas? poio horio eisete?
I'm french canadian i have no idea what you wrote and google translate isn't helping .
I think it's Greek.
Correct. The problem with the translators is that I wrote it phonetically in Roman alphabet.
What I said was: Hey Christos, What's up? Are you Greek? What village are you from?
French Canadian, that's close enough...
;-D
Blah blah blah...spare us the pointless analysis. There is no longer a properly functioning market.
Bear. Bull. Dog & pony! It's all smoke and mirrors.
The fact is that gold is heavily manipulated to mask the already failed western debt-based financial model.
Analysis is pointless until bullion is emancipated from fradulent ETF's and all the criminal attempts to suppress it's age old function as real money.
Karma will punish those thieving, lying bastards when the time is right. In the meantime and until the guillotines are in the town square, keep stacking boys and girls...it's the sale if the century out there.
Get your phyzzz and hide it under grannie's bed. Price discovery is on the way.
Note: and any goon who wants to try and dissuade the bugs with your bullshit arguments against gold...save yourself the trouble. Not interested in buying your apples you schmuck.
I wouldn't presume to try to disuade any "Bug" from accumulating real money, but I would argue that you will get more product in the coming weeks/months for the same amount of frn's you would spend today. $1200/oz. is a given, and $1000/oz. is very likely - perhaps even $800.
Now is NOT the time to "back up the truck", now is the time to sit and be patient - lower prices are coming your way.
Maybe yes...maybe no.
Buy some now. Buy some more then. Buy some more after that. (No suggestion of backing up a truck).
Unless you're a trader the fluctuations in price mean little.
Several years back I bought 1.7kg at 1889 and i still sleep very well...with it under my pillow.
The $300 delta between today and your prophecy will mean little once gold/ silver are set free...and this emancipation is the one outcome you can be confident of looking forward when the current mess is considered. Until then...every month is a good month to buy phyzzz.
The only price worth concerning yourself with is your own sale price.
Just keep stacking.
By "the improving macroeconomic landscape" they mean higher salaries for more Government employees and cuter outfits for the jolly coppers on parade.
Even on ZH we have to be optimistic when it is warranted by facts. The rising dollar and falling oil will improve things in the next few quarters. This may give the fed the cover story they need to raise rates A LITTLE.
The fed is trapped. We know it and they know it. So the can kicking will go on for a very long time.