Gold Shines Most in September on Seasonal Buys [5]
BLOOMBERG CHART OF THE DAY - September Sees 3% Gains Over 20 Years
Gold investors hurting from recent price falls and a long period of consolidation will be encouraged by the historical record and research and showing gold performs best in September.
The BLOOMBERG CHART OF THE DAY [6] shows bullion averaged gains of 3% each September over the past 20 years, beating next best month November, when prices rose an average 1.8% according to Bloomberg based on a market update by GoldCore. We covered gold’s seasonality and gold’s best performing months here [7].
Buying increases with India’s festival period, which runs from late August to October and is followed by the wedding season. At these times, bullion is bought for part of the bridal trousseau or in jewelry and bar form as gifts from relatives.
Chinese purchases may also increase toward year-end, before the country’s Lunar New Year celebration in February. China replaced India as the largest gold buyer in 2013.
“Indian jewelers and dealers will be stocking up in the coming weeks, so it should affect prices,” said Mark O’Byrne, a director at brokerage GoldCore Ltd. in Dublin.
“A lot of traders are aware of this trend towards seasonal strength, so that may contribute to higher prices. They tend to buy and that creates momentum.”
[7]See Gold’s Sweet Spot - Strongest Months Are August, September, November And January here [7]
[7]
Gold in U.S. Dollars - 2 Years (Thomson Reuters)
This morning gold in Singapore [8] ticked higher to $1,285/oz and gold in London has been bid higher to $1,293/oz.
Gold is now trading above its 200 moving average of $1284, and the gold price remains relatively strong despite a stronger dollar, rallying equity market indexes, and a relative easing of geopolitical tensions. Geopolitical risk remains heightened and yet complacency remains extremely high.
The gold/silver ratio is currently 66.10, near its one year high showing silver remaining very good value versus gold.
Receive our award winning research here
[9]