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ABC Bullion

Gold Seasonality

08 July 2014

With gold currently trading at US $1317oz and a fresh new financial year just started, lets take a quick look at the likely prospects of gold over the next few months.

Looking back over the years we can see that gold tends to display a certain seasonality that shows that Q3 is often a great quarter for gold prices.

This trend obviously has implications in terms of where the precious metal could be headed between now and September

Looking at Q3 data from 1979 to 2013, on average gold increased 5.05% through the quarter, although since 2001 it has been increasing at 6.45%. The largest movement was in 1979 of 43% courtesy of both the Soviet intervention in Afghanistan and as part of the huge run up to the 1980 Bubble top at USD $850oz

The team at Casey Research produced this excellent chart below that shows average monthly gains, and you can see the strength in July, and August and September in particular.

Seasonality

Given the above, if gold were to follow the historical trend of the past decade or so and appreciate by around 6.50% in the next few months, by the start of October it wouldn’t be unexpected to see gold trade at around the USD $1400oz mark.

For anyone who wants a more detailed read - i'd suggest Casey Researchs report (published in early March 2014) which you can link to here