WHERE WE ARE (Mid June 2010, after an all-time record high & short term peak-to-date):The late-May drop to $1,155 might have been the only buying opportunity during the slow season, in other words.
Barring a catastrophic deflationary collapse (of greater magnitude than the Summer of 2008) Gold's Seasonality is not likely to factor greatly nor offer buyers any deep discounts this year.
Why? The historic norm for 8-12 weeks (what's left of our 2010 Seasonality) would be a -5% decline off the 'April High' ($1179. > 1120.) But that would entail an unprecedented fast & steep -10% Decline from today's POG: an anomaly.
Far more likely and only repeating last year's anomaly, there will be a very slight or no Seasonal Decline at all. As mentioned above, the absence of a typical pullback signals the alarming possibility that Gold now has a solid base, to launch towards $3,500/oz. (and beyond?) within 2 years and perhaps without any more Seasonal buying opportunities.
If there's any chance left this Summer, Gold Buyers should hope (pray?) for a low historical average- or median decline of ~8% from the Current Peak: that's a Target Price to BUY @ $USD 1,150./oz. sometime around/before Late September. Anything lower & sooner will be gifting you a golden opportunity you won't want to miss!
Thursday, June 24, 2010
Seasonal Decline As buying Opportunity
"Analyste de Boston" has dissected gold's seasonality during summertime and found that the median duration of a summer decline was about 18 weeks and the median drop in price was 7.7%; the average drop was 8.8%. Also noted is the fact that, except for one year, the absence of a seasonal decline in the May-September period signals either the beginning of a bull market or the onset of an all-out bubble, with one exception: the 2008 credit crisis, which saw a huge decline in September and October.