Gold Seasonality Over 30 Years

April 30, 2003

The 'Gold: Second Half Increase' is the seasonal rise in gold, starting on May 5 and ending on January 21 of the following year. The increase was observed in 20 of 30 years, resulting in an average profit of +19.2%. But there were also 10 years, where the price of gold fell during this period of the year. The average loss then was -12.3%. The overall rise during all 30 years was +7.6% p.a.

The 'Gold: Second Half Increase' lasts 259 calendar days. It took place in 66% of all years. Thus the statistical stability of this seasonal pattern is acceptable. It is necessary to take steps to minimize losses (e.g. through stop loss).

There was no 'Gold: Second Half Increase' during the second half of the 1990s. Gold fell during those years. More, it is being manipulated by order of the central banks. Thus one cannot judge accurately, whether this seasonal pattern is valid at present. The following table shows all 'Gold: Second Half Increases' since 1985:

19850507 313.50 19860121 356.50 43.00 13.72 % 19860507 342.45 19870121 407.20 64.75 18.91 % 19870507 456.25 19880121 477.20 20.95 4.59 % 19880509 444.40 19890123 407.45 -36.95 -8.31 % 19890508 378.25 19900122 406.00 27.75 7.34 % 19900508 370.65 19910121 378.20 7.55 2.04 % 19910507 356.15 19920121 357.80 1.65 0.46 % 19920507 336.05 19930121 329.75 -6.30 -1.87 % 19930507 357.50 19940121 386.00 28.50 7.97 % 19940509 381.00 19950123 382.35 1.35 0.35 % 19950509 388.10 19960122 402.20 14.10 3.63 % 19960507 393.70 19970121 354.70 -39.00 -9.91 % 19970507 341.10 19980121 291.00 -50.10 -14.69 % 19980507 298.10 19990121 287.75 -10.35 -3.47 % 19990507 282.40 20000121 287.75 5.35 1.89 % 20000508 277.90 20010122 266.15 -11.75 -4.23 % 20010508 265.20 20020121 282.30 17.10 6.45 % 20020507 312.00 20030121 353.80 41.80 13.40 %

Notice: Our Hot Tips are no trading recommendations. In fact, they are a real time test of seasonal patterns. Trading with seasonality requires additional means to reduce losses, for example diversification, the implementation of further indicators, or stop losses. You can find an introduction into seasonal trading under trading strategies. Please take also notice of the results of our previous tips and of our disclaimer.


 

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China has only 2% of its Total Foreign Reserves in gold.

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