by Palisade Research
Looking back at gold’s performance since 1979, August and September are big months for the yellow metal. What is the cause? No one really knows but there are some theories that have been thrown around.
The adage “sell in May and go away” is common in the mining sector. Investors are back from vacation and ready to deploy their cash in a big way. Concurrently, the largest financial crashes have occurred in September and October, investors are also buying gold to hedge their portfolios.
Indian wedding season is huge for gold, and if you have ever been to a traditional Indian, its easy to see why India is the World’s largest consumer of gold jewelry. Throw Christmas into the mix, and you have the perfect retail storm.
Lastly, the European Central Bank and 20 other European central banks are currently governed by a Central Bank Gold Agreement, which ensures all banks operate with transparency and do not engage in large uncoordinated gold sales. The Agreement dictates the limit in sales, and resets every September, meaning the market may see less selling activity.
In the 38 years we used for the chart, August had only 14 years of negative returns, while September had 13. Regardless if these theories are true or not, its hard to ignore the decades of data that suggest the best months of gold are yet to come.
Gold’s Best Months Are Coming – Read here
The precious metal’s ‘summer doldrums’ period is coming to a close. Traditionally seasonal factors often result in weakness in gold and silver, particularly in May and June. This frequently creates an attractive buying opportunity for those seeking to allocate funds to the precious metals.
The data is compelling as seen in the Palisade table above. However, it is important to realise that the seasonal data is just another indicator and short term speculation should be avoided in favour of long term investment diversification.
It is important to focus on gold’s value rather than simply its price. Gold’s value is as an investment hedge and financial insurance against financial and monetary crises. There is a real of another global financial crisis in the coming months and in 2018 and hence the importance of owning physical gold and silver.
Owning physical coins and or bars in your possession and in allocated and most importantly in segregated accounts will continue to protect and grow wealth in the coming years.
Gold Bullion Averages Biggest Seasonal Gains in September Over Past 20 Year – Read here
Gold’s Sweet Spot – Strongest Months Are August, September, November And January –Read here
News and Commentary
Gold Prices (LBMA AM)
25 Jul: USD 1,252.00, GBP 960.78 & EUR 1,074.59 per ounce
24 Jul: USD 1,255.85, GBP 962.99 & EUR 1,077.64 per ounce
21 Jul: USD 1,247.25, GBP 958.89 & EUR 1,071.39 per ounce
20 Jul: USD 1,236.55, GBP 953.63 & EUR 1,075.06 per ounce
19 Jul: USD 1,239.85, GBP 950.84 & EUR 1,074.83 per ounce
18 Jul: USD 1,237.10, GBP 949.47 & EUR 1,071.82 per ounce
17 Jul: USD 1,229.85, GBP 940.71 & EUR 1,074.03 per ounce
Silver Prices (LBMA)
25 Jul: USD 16.31, GBP 12.52 & EUR 14.00 per ounce
24 Jul: USD 16.50, GBP 12.66 & EUR 14.17 per ounce
21 Jul: USD 16.43, GBP 12.63 & EUR 14.11 per ounce
20 Jul: USD 16.18, GBP 12.50 & EUR 14.07 per ounce
19 Jul: USD 16.23, GBP 12.44 & EUR 14.08 per ounce
18 Jul: USD 16.17, GBP 12.41 & EUR 13.99 per ounce
17 Jul: USD 16.07, GBP 12.30 & EUR 14.02 per ounce
- Mark O'Byrne, www.GoldCore.com