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GOLD: Will This Summer’s Rally Mark A Cyclical Turning Point?
We focus on gold's seasonality in this column and what it could mean for gold's secular trend.
Between 1982 and 2012, gold typically started rising in early July, corrected slightly in October, and finished the year strongly higher. The first chart, courtesy of our friend, author, and market analyst Dimitri Speck, shows that the second week of June typically kicked off the yearly rise with a final dip.
Courtesy: Seasonal Charts
Included within that 30 year time frame was a secular bear market (until 2001) and a secular bull market (as of 2002). We look more closely at gold's seasonality since the secular bull market started in 2002. The second chart, courtesy of StockCharts, shows the number of months in which gold closed higher than it opened. Clearly, July through September stand out with the largest number of higher monthly closes, while October is one of the weakest months in the year.
The same seasonality picture for the period between 1990 and 2000, the last decade of gold's secular bear market, shows a random picture of up and down months, without a consistent rise during the summer months. We assume that is typical behavior during a weak market.
We conclude that gold bulls want a strong summer which will confirm that the gold secular bull market is still intact.
Looking one level deeper into the summer rallies in the current secular bull, we found some interesting insights. The table below shows the exact period in which gold had a summer rally, along with the % price rise in USD. Interestingly, we see that gold started to rally between June and mid-July in 8 out of the last 10 years. Over that same period, the average price rise during those rallies was 16.3%.
What does this mean in the context of the current cyclical bear market within gold's secular bull? To answer that question we rely on the long term trendlines on the weekly and monthly charts. The trendline on the weekly is marked in red.
The general rule is that the significance of a trendline increases substantially with every touchpoint. The red trendline on the weekly chart has the highest number of touchpoints. We believe that gold broke out mid-March of this year, as indicated with the green oval. One could argue that the breakout went unnoticed, as few have spoken about this “event,” concluding that it was unimportant. Our view is the opposite. Because it went unnoticed during a cyclical correction (bear market), it increases the odds that it was THE important event. That is how bear markets end, and especially when nobody talks about it.
This summer's seasonality is quite important. If gold's summer rally is strong, we will conclude two things.
- First, we will have a confirmation of the seasonal trend during the secular bull market, increasing the probability that the secular bull is still intact.
- Second, the probability increases that the breakout point already occurred in March.
However, even if the summer rally does not occur and we see a continuation of the sideways pattern, there is still evidence that gold remains in a secular bull market. The next chart shows that the secular trendline marked in blue will touch the $1200 price level in about a year. That means gold can trade sideways for a year without invalidating its secular bull trend.
Smart investors do not anticipate a particular move, they prepare themselves for what is likely to happen. A breakout in gold and silver is a high probability move. That is why we recommend an investing roadmap based on the very best gold and silver plays.
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The drivers for the gold price are inflation, bank bail-ins, collapse of faith in fiat money, and expectations of the foregoing.
Right now, gold is held up by expectations alone; $1200 of fiat weighs less than an ounce of gold and is easier to hide.
Let me know when you see the rally.
A rally? You call this a fucking rally? At $1157 this week? For the life of me, I feel like a stranger in a VERY strange land, when this is deemed a rally? Two, three weeks ago gold was over $1200.
Get real. Bitches.
It's only paper gold falling, physical gold is rising. haha.
This isn't going to help:
http://www.nanowerk.com/nanotechnology-news/newsid=40661.php
There isn't going to be a Summer rally. Gold as a trade is dead. When the price creeps up those who can will sell enormous amounts of paper gold and before the dollar itself crashes 'gold promises' will probably be worth close to nothing. We are in an era of fractional reserve gold banking.
FFS look at the 250++ billion in 'gold' traded daily on the Forex!!
Gold is a great safe place to store wealth. This may be the best time ever to buy it. If a rally is needed to convince you of this however...you just don't get what is happening.
"GOLD: Will This Summer’s Rally Mark A Cyclical Turning Point?"
NO
It could surprise to the downside too.
Look Tyler a ZH coin. https://silvergoldbull.com/1-oz-2014-the-end-of-the-line-silver-round
+100. Close but what an excellent idea. A ZH round.
If the masses started buying phys in great amounts and I mean great amounts it would break them, and crush fiat at the same time!
One thing for sure is that the last thing TPTB ever want to happen is for the sheeple to learn that gold is money and paper is paper, they will do very dubious things to prevent that from happening.
remember the london gold pool where approx 7 .gov's tried to keep gold at $35/oz and if it rose or tried to rise above that they would sell however much gold it took to knock it back down!
Do you think they have forgotten?
Probably not.
It is hard to see CB's printing money the way they do. Governments getting further and further into debt to the point that they cannot afford normal interest rates. Historically PM's and gold in particular have been the brakes to keep this madness to go to the extremes and stop it before it is too late. We can see that this time the world is going to fall into the precipice, no doubt about it. To the ones who own PM's and mining shares: do not give up, we are close, very close to the big reset. We all see the early signs and they are going to be more and more numerous, to the point that the events will be unstoppable. Finally... Prepare to uncork the champagne bottle!
Historically the Fed had Bretton Woods to keep the Gold price in check, while they printed money with abandon. When Spain called them on their scam, they were forced to abandon Bretton Woods, and without a new mechanism in place to control the Gold price, it rose to it's peak in 1980. It took a few years to get everything in place, but the next Gold suppression scam was the "lending" of Gold to Barrick at ridiculous rates, and having Barrick turn around and dump the borrowed Gold into the market. This increased supply and thus suppressed prices once again. This worked wonders until most of the Western Central Banks were emptied of their gold, and in 2001, Gold began another rise to it's most recent peak in 2011. During this time the Fed was busy putting in place it's latest Gold suppression scheme, which is endless free funds to the major (Bullion) banks, plus the end of honest reporting by these same banks. Of course, this scheme will by design also fail at some point, but nobody knows when.
ETFs are the scheme.
They are part of the scheme, but don't mop up enough demand, or supply enough physical to suppress the Gold price all by themselves.
I used to get hard time for pushing gold on here.. but I seen this shit coming years ago and I believe physical GOLD is the safest position one can take. Problem is, as already mentioned in this thread, ordinary Joe public knows lots about Kim Kardashian's fat ass but fuck all about Physical gold.. Thats why I want a few ZH's to join me ... you guys are ENLIGHTENED. if we educate a few people, get them saving a few grams each month.... well maybe in a year or 2 or 4 they might just thank us for it.. they have some AU ... we have some AU ...and we all earn a few $€ for our effort. --ITS AS GOOD AS ITS GOING TO GET GUYS..
I dont know what you all do for a living...,but i know you will never get into a more lucrative business for as little capital outlay ever... period.. fuck me i'd charge you more just to get you registered for taxes for opening a regular high street store. There has been a few good guys from ZH that has joined me because the see the potential and are not too pompous to believe its beneath them - cheers guys.
is it a quick buck.. hell no... you gotta earn your keep... just like any business... but it pays really well if you put in the grease..only question you got to ask yourself.. have you the balls for a bit of networking...
Look guys .. this thing works... if you're unsure.. contact me I will reassure you.. Im certainly not a idiot and I'm not a spammer... but I do want to help ordinary people get some AU. I got a kick in the balls yesterday from some ZHer who reckons that our affiliate programme was going to somehow wind up fucking his friends and family over by having a stack of gold... not sure what his logic to that is... my family are quite happy having a little stack of the phyzz.
and finally its not an MLM... its simply referral.. same as amazon..so dont get your knickers in a knot okkonwwhat...
www.teamramgold.com
Pro nuclear trolls, paid pimps of the industry, attack a concerned mother, calling her a "stupid rat"
http://nukeprofessional.blogspot.com/2015/06/trolls-attack-stupid-rat-mo...
Wake me up when silver is 50 buck and gold is 2000.
My local guy who has been in business a LONG time told me today .. if gold ever goes over 2000 he will be surprised.. maybe by 2018 . he is into cycle theory based on experience... but he says silver had a better shot at going up exponentially . hope he is right ..
Boy me too. I was very naive in 2010 when I started buying gold/silver as I listened to Porter Stansberry's hysterical presentation on the end of america as we know it.
So, did you fall for it and get suckered in to his "newsletter?" What a waste of money and trees. Total bullshit IMO.
If gold is not manipulated, it has been signaling a major defation coming for several years. Look at oil and it is pretty much the same. A bear market in stocks (should it occur) will also be deflationary. The extreme levels of debt in the bond market will cause a huge deflation if they are liquidated. If so, it will likely not be an even deflation, but mainly in financial instruments, real estate and luxury items. Consumer goods will probably continue to inflate since demand will be relatively constant.
Interesting that some posters have such strong feelings against gold. If they dislike it so much, why don't they spend their time on something they enjoy? I don't think gold is flying off the shelves anywhere today - everyone has been burned. Market lows are reached when everyone capitulates. Then the cycle starts again.
The Golden Rule: He who has the gold makes the rules.
Seasonal trends, massive buying of physical by China and India, endless printing of money, COT reports, weak dollar OMG the list goes on and on of how many different reasons gold SHOULD go up but here we still are waiting for it to go up. I am beginning to think the apocolypse will come an gold will be sitting at $1100 per ounce on all of our computer screens.
IMO, gold will rise quickly when Central Banks start to aggressively monetize debt to maintain interest rate suppression policies. So. Until the bond market calls out the Central Banks in general, the FED in particular, I don't imagine gold demonstrating much price movement one way or the other.
Nice thought, but I won't hold my breath.
I thought he who had the printing presses and full control of the money supply via corrupt back-room deals made when no one is looking on Jeckyl Island made the rules?
could be wrong...
The powers to be do not want anyone thinking pm's are a safe haven, let alone a "good" investment.
This, while they accumulate and repatriate.
Makes one wonder if they know something we don't.
Any one of three factors contributes to the price of gold, the dollar, interest rates, and commodities prices. Of the three, interest rates aught to decline, but the others are a toss up just how much their values are dependant on balance sheet expansion of central banks.
An inflationary scenario would see dollar declines and interest rates below inflation, but a deflationary scenario would see dollar appreciation, commodities declines, and interest rate declines.
I think interest rate declines will be the salient factor.
Eric Sprott & King World News are also predicting a gold rally -- wow!
Heck everybody in China wants to buy gold yeah, and in USA physical demand is unstoppable but wait, the price is maniiiiiiiiipulated so it never goes up. LOL!!!
Sprott owns this domain, BTW.
You live in a fairytale world if you think there's no manipulation. From GATA:
-- Was the Banque de France's director of market operations, Alexandre Gautier, telling the truth when he told the London Bullion Market Association meeting in Rome in September 2013 that the bank is secretly trading gold for its own account and the accounts of other central banks "nearly on a daily basis"? (See: http://www.gata.org/node/13373.)
-- Is the Bank for International Settlements telling the truth when it maintains in its annual report that it does the same sort of secret trading on behalf of its member central banks, trading not only gold itself but also gold futures, options, and other derivatives? (See:http://www.gata.org/node/12717.)
-- Is the BIS sincere when it advertises that it undertakes secret interventions in the gold market for its members? (Seehttp://www.gata.org/node/11012.)
-- Was CME Group, which operates the major futures exchanges in the United States, telling the truth last year when it told the U.S. Commodity Futures Trading Commission that it is offering volume trading discounts to central banks for secretly trading all contracts on its exchanges? (See http://www.gata.org/node/14385.)
-- Was CME Group telling the truth last year when it told the U.S. Securities and Exchange commission that its customers include governments and central banks? (See http://www.gata.org/node/14411.)
-- If central banks are indeed doing so much secret trading in the gold market and other markets, what are their objectives and might this secret trading be intended to manipulate markets, support government currencies and bonds, and deceive and cheat investors who think that markets are free trading?
There is a lot more documentation suggesting as much here:
http://www.gata.org/node/14839
No fairytale world here I'm in the trenches on physical bullion and have been for years as a buyer. Listen up for a different perspective, if all you can think about and say is manipulation.
Sure the evidence of "manipulation" is compelling I guess, but the fact is, physical gold bullion is available right now as much as I want from local dealers who have stores open to the public (I'm a buyer and have been for years). I can go buy 40 oz gold today if i want.
When gold blew past $1600 on the way to $1900, those shops were relatively busy, supplies tight, and the local bi-annual coin shows were very busy. So public demand for physical was driving price up in my opinion. The LCS today are very slow.
Also, I was pretty naive in believing the bullshit ZH reports about customers in China stampeding to buy physical gold. Ha, what a joke that is. Total fucking JOKE. I was in China twice, and that includes Hong Kong, Shanghai and Beijing, with plenty of time on my hands and an interest in learning about the gold market. The best example of demand in China for gold was in Shanghai, they had a three story "Mall" just for gold sellers. More gold than you've ever seen and will ever see, at this mall located near the crowded old town (forgot the name of the old town). Guess what, the entire three story gold mall was EMPTY with zero customers and I mean zero. My daughter and I were the only souls in that place. At one point we had to exchange dollars for RMB in Beijing and went into a bank, there were medium and small bars of gold right there in the window for sale at spot (or near spot) for anyone to buy. Guess what -- no buyers. I asked my associate in Beijing about gold and she said only old people buy it. New generation wants no gold.
So take that put it your pipe and smoke it.
This is you.
Have you ever come across someone on the Internet that you suspected was a paid government troll? Well, there is a very good chance that you were not imagining things. Thanks to Edward Snowden, we now have solid proof that paid government trolls are using “psychology-based influence techniques” on social media websites such as YouTube, Facebook and Twitter. Documents leaked by Snowden also reveal that government agents have been conducting denial-of-service attacks, flooding social media websites with thinly veiled propaganda and have been purposely attempting to warp public discourse online.
http://www.zerohedge.com/news/2015-07-02/government-trolls-are-using-psy...
US public demand is negligable. Big boys can affect the gold price but there are not enough people who want to buy gold to drive the price up. Not even close.
" I can go buy 40 oz gold today if i want."
Are you stating this is how much fiat you have or you think that 40oz is a lot of gold for a dealer to have on hand?
40oz is not much gold to expect a dealer to have 40,000 oz maybe.
You remind me of some associates that state " where did your read this, the internet".
So we are all to take your word for how little gold is being sold in china! One guy says so so it must be true!
Laws of business would state that with this huge mall that you speak of and all these gold stores, wouldnt they be out of business if they were not selling?
A few years ago during the run up in gold prices, LCS had very little inventory. I lived it day to day. You even had to wait your turn, taking a number at some. Today LCS are totally different, far less traffic, plenty of inventory. If you don't believe that, fine but you didn't spend much time in shops or shows then.
I just checked the district in Shanghai -- Yu Yuan Market. As is many unusual occurrences in China of things built with zero activity, but I was surprised to see a three story gold mall completrly empty. Two years ago ZH tried pretty hard to promote the idea that gold shops were full of frantic buyers. No. First hand view here. I sought out gold shops and they were stuffed with bullion and void of customers. PERIOD. I can't speculate on demand from central bankers or huge non-retail buyers, but I can tell you that there is no shortage of small gold bars or 24k jewelry.
Now you can conclude that gold prices are only set by manipulators. I like to think the lack of consumer interest in purchasing bullion plays a larger role. Based on a lot of buying on my part, and examination of my local market and those in China and Europe (where dealers are sparse and pay well below spot). I still like gold as insurance. Very much. But I don't believe most of the crap posted here on gold. But for the ultimate BS on gold, read King World News.
Your usual baseless opinion. Never a link or even a photo to support what you say. We're supposed to assume that what you say is true with ZERO information to back you up.
Funny because I actually snapped a photo of the gold bars sitting in the exchange window. You seem like a "Kill The Messenger" guy without much else to offer. I've spent a lot of time sharing good information. If you are really interested in this further then try Google street view of that market. Yu Yuan in Shanghai. Or find someone from China and ask them. Or go check it out yourself. Do you really not believe I'm making this up? LOL.
I am just stating that the proof is always in the pudding.
Like I had stated before laws of business would dictate that if the sales were that bad some of those gold stores would be closing.
Maybe they all have greater sales at the end of month or something else, but still, when you go back to china and report that all of these stores are closed then we will have something to go on. but thank you for your report.
Yes Yes, everyone Knows central banks have all the answers, the dollar will hold reserve status forevermore and they will print without any negative consiquences . The economy is ready for lift off any minute and no FIAT has ever failed. Long live Obama and his queers Long live the dollar and death to the old stupid people who remember history and prepare !
The problem is, you may run out of heartbeats before the Fed runs out of confidence.
Your perspective of supposedly walking around a little in China, even if true, in no way represents any serious research. Your opinions are of no value for serious analysis. If you want to educate yourself concerning Asian gold demand and other relevant subjects you should look here:
https://www.bullionstar.com/blogs/koos-jansen/
OK I'll dismiss the empty gold mall I saw in Shanghai I saw with my own eyes, forget about the dusty gold bars sitting in the window of a random exchange bank in Beijing, erase from memory all conversations I had in China about gold, and read the blog of Koos Jansen instead despite the fact that clicking on that link doesn't really reveal anything about citizen demand for gold in China. OK then, without the manipulators in London, gold shops would be out of stock even at $3000/oz. Whatever floats your boat pal.
stoopid old dusty relics in random exchange banks, they're not even backed by anything.... tell us about all the conversations you had about gold in China.
Now you're really funny. You got your little .gov trolls to help you out with some downvotes I see.
I guess you have a paralyzed index finger since you were unable to scroll down to this article.
https://www.bullionstar.com/blogs/koos-jansen/strong-withdrawals-mainlan...
A little short on brains huh?
Which gold?
The one that is an element on the periodic table?
Or the one that is printed on paper and traded in markets?
You can't get the first via the second anymore with any predictability.