Gold Seasonal Strength Is Coming

Gold trades roughly in two halves each year, with the first half of the year usually largely range-bound and the second half much stronger. The chart below is a composite average of the last 14 years with each year indexed to 100 to show you what gold does over the next 12 months. The result is obvious. The take away lesson is that we are at the launch point for the strong season, so expect gold to be about 10% higher by December. This is because of the Indian wedding season, then the Christmas rush and finally the Chinese new year gobbling up global supply, all in one half of the year.

Unlike the aberration of 2013, the year so far has been a textbook example of this pattern in action. This suggests the second half will take out the $1360 top from March, and challenge the $1425 top from late last year, thereby re-establishing the bull market.

God bless

Kevin

 

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