Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Dividend Aristocrat Is Leading the 5G Revolution - 22nd July 19
What the World Doesn’t Need Now is Lower Interest Rates - 22nd July 19
My Biggest 'Fear' For Silver - 22nd July 19
Reasons to Buy Pre-Owned Luxury Car from a Certified Dealer - 22nd July 19
Stock Market Increasing Technical Weakness - 22nd July 19
What Could The Next Gold Rally Look Like? - 22nd July 19
Stock Markets Setting Up For A Volatility Explosion – Are You Ready? - 22nd July 19
Anatomy of an Impulse Move in Gold and Silver Precious Metals - 22nd July 19
What you Really need to Know about the Stock Market - 22nd July 19
Has Next UK Financial Crisis Just Started? Bank Accounts Being Frozen - 21st July 19
Silver to Continue Lagging Gold, Will Struggle to Overcome $17 - 21st July 19
What’s With all the Weird Weather?  - 21st July 19
Halifax Stopping Customers Withdrawing Funds Online - UK Brexit Banking Crisis Starting? - 21st July 19
US House Prices Trend Forecast 2019 to 2021 - 20th July 19
MICROSOFT Cortana, Azure AI Platform Machine Intelligence Stock Investing Video - 20th July 19
Africa Rising – Population Explosion, Geopolitical and Economic Consquences - 20th July 19
Gold Mining Stocks Q2’19 Results Analysis - 20th July 19
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Take Advantage of Gold, Silver, Platinum and Palladium Different Seasonal Trends

Commodities / Gold and Silver 2016 Dec 14, 2016 - 03:15 PM GMT

By: Dimitri_Speck

Commodities

Prices in financial and commodity markets are exhibiting seasonal trends. This applies to the precious metals gold, silver, platinum and palladium as well.

The chart below depicts the seasonal trends of the gold price over a time period of 45 years.


Gold price in USD, seasonal trend over 45 years

Seasonal Gold Prices
The price of gold typically rises from early August until the end of February
Source: Seasonax

Gold prices typically experience a seasonal rally in the second half of the year, with the advance beginning in early August and extending into late February of the following year. The positive seasonal trend in gold prices is highlighted in dark blue.

The gold price has increased until the end of February in 29 out of 45 cases

Gold prices have risen in 29 out of 45 cases during the seasonally strong period. In the 29 rally years, the average gain over this time period amounted to 17.85%, while the average loss in the 16 years exhibiting declines amounted to 8.17%. An especially large gain of 133,25% was recorded in 1979. The largest loss occurred in 1976, but amounted a much smaller 20.36%.

The bar chart below shows the gains and losses gold has posted during the seasonally strong time period in every year since 1971 (green bars represent gains, red bars losses):

Gold in USD, return in percentage points between August 7 and February 21 for every year since 1971

Gold in USD, return in percentage points between August 7 and February 21 for every year since 1971
Gains (green bars) significantly exceed losses (red bars).
Source: Seasonax

Evidently, gains in gold prices are both more frequent and larger than losses during the seasonally strong period. However, between 1980 and the late 1990s, no large returns were generated during this time period, as gold was mired in a large-scale bear market.

Festivities are driving the gold price

The main reason for the positive seasonal gold price performance between early August to late February are various festivities, including Christmas, the Chinese new year celebrations and the Indian wedding season. Gold is frequently given as a gift on these occasions. Jewelry makers and merchants tend to stock up on gold prior to the festivities, and tend to push up gold prices in the process. Around two thirds of annual mine production are used by the jewelry trade.

Silver: shooting star at the beginning of the year

Silver's industrial metal characteristics are far more pronounced than those of gold. The next chart illustrates the seasonal trend of the silver price.

Silver price in USD, seasonal trend over 45 years

Silver Seasonals
Silver tends to exhibit a rapid seasonal rally at the beginning of the year
Source: Seasonax

As you can see, the seasonal price trend of silver is completely different from that of gold. Silver typically rises rapidly at the beginning of the year. It has done so in 30 out of the past 46 years. Gains of up to 47.35% were posted - in a mere 26 trading days from the beginning of the year until February 19.

Industrial metals are subject to seasonal trends of their own

Interestingly, platinum and palladium prices are also recording strong seasonal gains at the beginning of the year - instead of from August onward like gold. In other words, industrial demand is the dominant driver of their seasonal price trends. Very likely many industrial users tend to place their buy orders early in the new financial year.

While such calendar-driven business practices appear detrimental if one wants to obtain the best possible prices, annual planning and ordering procedures are often aligned with the financial year. Purchasers of precious metals may not be aware of the seasonal price trends, may be ignoring them because their in-house procedures are taking precedence.

Take advantage of the seasonal trends in precious metals!

As an investor or trader you can take advantage of the seasonal trends in precious metals in order to improve the timing of your purchases and sales and to manage the appropriate level of investment. Over time, this should result in obtaining more favorable prices. Keep in mind that seasonal price trends are averages and deviations are possible in some years. Nevertheless, seasonal trends can benefit you by making probability work in your favor.

Dimitri Speck,

Seasonax.com

© 2016 Copyright Dimitri Speck - All Rights Reserved - Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules