Seasonal Variations in the price of gold

The price of gold rises more during the second half of each year.  A study by the International Speculator has confirmed this fact and is based on an analysis of the rise in the price of one ounce of gold in dollars over a period of thirty years.

Gold seasonal variation

The first observation is that pricing patterns in June and July have  with near perfect consistency, allowed investors to buy gold at levels still below the average annual price for that year. And the key point here is any purchases throughout June and July on average proves to be a fruitful maneuver by year-end.

The simplicity of this seasonal trend is a useful insight for bargain hunters. In fact, over the past 30 years, this trend holds on average, and over two-thirds of the average annual gains have been registered between August and December.

70% of all gold manufactured each year goes into jewelry, and is one of the major reasons for the seasonal pattern in gold.

Consumption causes prices to be low in summer when European jewelry fabricators are on vacation but then to rise immediately thereafter. The fourth quarter is the peak season for gift-giving, with gold jewelry most highly prized.

Harvest and wedding festivals begin in September in India, the world’s largest consumer of gold. Then come year-end holidays in the United States and finally Chinese New Year. By late December, gold demand can be exhausted.

In January, when most amateur traders are bullish, the professionals are starting to sell the gold they accumulated way back in July.

Maurice Hall

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"For a mountaineer, the important things are the effort, the posture and the muscles. The rope that holds him serves no purpose when everything works but it gives him a sense of security. In the same way, all gold does is ensure confidence; it's a safe haven."