Summer Doldrums Hit Sterling Gold Price - 20 July 2012
The Gold Price for UK savers has gone nowhere for 2 months...
LONG-TERM ANALYSIS of the stock-market shows that the adage "Sell in May" is based on hard fact, if not quite a fail-safe timing strategy, writes Adrian Ash at BullionVault.
Gold investors and traders should note the seasonal pattern to bullion prices, as well.
The Gold Price is Sterling hasn't gone anywhere for two months now. That's perfectly usual over mid-summer however.
Dipping from a spring peak and holding flat through the summer, gold typically makes a clear break to new ground in early autumn. What's then separated bull from bear markets has been a sharp gain running into Christmas and the New Year.
Nineteen times in the last 44 years, in fact, Buying Gold even at its highest price during July or August has paid off for UK investors by year end. It's returned some 13.5% on average. Whether or not 2012 continues to map that path, flat prices are very much the norm for gold at the current time of year.
What lies behind this seasonal pattern? The same summer lull that hits equity markets also hits precious metals dealing desks, of course. It's also monsoon season in India (not just the UK), meaning consumer gold-buying in the world's hungriest physical market is traditionally absent. As a rule, it then surges into the auspicious festival of Diwali, which tends to coincide with the dread late-autumn jitters in Western equity markets.
Adrian Ash runs the research desk at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, Adrian Ash was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern and FT Deutschland; Italy's Il Sole 24 Ore, and many other respected finance publications.