• 254 days Will The ECB Continue To Hike Rates?
  • 255 days Forbes: Aramco Remains Largest Company In The Middle East
  • 256 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 656 days Could Crypto Overtake Traditional Investment?
  • 661 days Americans Still Quitting Jobs At Record Pace
  • 663 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 666 days Is The Dollar Too Strong?
  • 666 days Big Tech Disappoints Investors on Earnings Calls
  • 667 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 669 days China Is Quietly Trying To Distance Itself From Russia
  • 669 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 673 days Crypto Investors Won Big In 2021
  • 673 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 674 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 676 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 677 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 680 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 681 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 681 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 683 days Are NFTs About To Take Over Gaming?
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Seasonal Recycling in Gold

Even paying July/August's top price for gold has averaged 5.1% returns by New Year's since 1968...

It's a hardy perennial for anyone studying the gold market. And with the British summer being more like November this year, very hardy perennials are just what is needed.

But will the gold price blossom on schedule?

Gold Price in Dollars: Average Performance (median)

Greener than George Monbiot's socks, we're happy to recycle this fact yet again. The gold price tends to display a seasonal pattern - rising in spring, slipping or flat-lining in summer, only to rise once more in the fall and then winter.

No, the pattern was shot in 2011 as we noted last July. But such profitable "summer sales" have occurred most frequently during longer-term bull phases, as we told the Financial Times in 2009.

For Dollar investors, buying gold even at the highest price in July or August has only failed three times to deliver a gain by year's-end since this bull market began in 2001 (extending a pattern we noted in 2010. Lehman's collapse threw 2008 out of sync). Indeed, buying gold regardless of price in July or August has paid off 20 times in the last 44 years all told - and delivered an average 5.1% profit even with the losses included.

Now, this is hardly the way to time a serious move into gold. Buying regardless of price? Just because history says the summer average rewards it by year's end?

Viewed as crisis insurance, however, gold comes at a cost - your premium being the price you pay when you take out your policy. Sensible home economics says you should look for best value. Only here, cutting your premiums needn't void your insurance.

Sure, the gold price could well go cheaper from here. But if it doesn't, and people scramble once more for the security, liquidity and diversification only a lump of rare yellow metal can bring, then the current lull could be offering insurance at summer sale prices.

And so far this year, gold's summer sale is looking utterly typical.

 

Back to homepage

Leave a comment

Leave a comment