Gold News

Playing the Gold Price Averages in Summer 2012

Summer 2012 is sticking right to the typical Gold Price pattern so far...

IT'S A HARDY perennial for anyone studying the gold market, writes Adrian Ash at BullionVault. And with the British summer being more like November this year, very hardy perennials are just what is needed.

But will the Gold Price blossom on schedule?


Greener than George Monbiot's socks, we're happy to recycle this fact yet again. The Gold Price tends to display a seasonal pattern – rising in spring, slipping or flat-lining in summer, only to rise once more in the fall and then winter.

No, the pattern was shot in 2011 as we noted last July. But such profitable "summer sales" have occurred most frequently during longer-term bull phases, as we told the Financial Times in 2009.

For Dollar investors, Buying Gold even at the highest price in July or August has only failed three time to deliver a gain by year's-end since this bull market began in 2001 (extending a pattern we noted in 2010. Lehman's collapse threw 2008 out of sync). Indeed, buying gold regardless of price in July or August has paid off 20 times in the last 44 years all told – and delivered an average 5.1% profit even with the losses included.

Now, this is hardly the way to time a serious move into gold. Buying regardless of price? Just because history says the summer average rewards it by year's end?

Viewed as crisis insurance, however, gold comes at a cost – your premium being the price you pay when you take out your policy. Sensible home economics says you should look for best value. Only here, cutting your premiums needn't void your insurance.

The Gold Price could well go cheaper from here. But if it doesn't, and people scramble once more for the security, liquidity and diversification only a lump of rare yellow metal can bring, then the current lull could be offering insurance at summer sale prices.

To date, this summer's lull is looking utterly typical so far.

Cut your costs further – get the safest gold at the lowest prices using world #1 online, BullionVault...

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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