#Autumn chase drivers

Gold’s correction cascaded to serious proportions, hitting -17.3% in mid-December 2016. Investors fled gold to chase the taxphoria stock-market surge. Gold corrected after that sharp initial upleg, but normal healthy selling was greatly exacerbated after Trump’s surprise election win. After falling to a 6.1-year secular low in mid-December 2015 as the Fed kicked off its last rate-hike cycle, gold powered 29.9% higher over the next 6.7 months.Ĭrossing the +20% threshold in March 2016 confirmed a new bull market was underway. Price action is very different between bull and bear years, and gold remains in a middle-aged bull market. Since it is gold’s own demand-driven seasonality that fuels gold stocks’ seasonality, that’s logically the best place to start to understand what’s likely coming. Today gold stocks are once again back at their most-bullish seasonal juncture, the transition between the typically-drifting summer doldrums and big autumn rallies. Naturally the gold stocks follow gold higher, amplifying its gains due to their profits leverage to the gold price. So during its bull-market years, gold has usually tended to enjoy major autumn rallies driven by these sequential episodes of outsized demand. That’s not only for adornment on their wedding days, but these dowries secure brides’ financial independence within their husbands’ families. And Indian parents outfit their brides with beautiful and intricate 22-karat gold jewelry, which they buy in vast quantities. Indians believe getting married during their autumn festivals is auspicious, increasing the likelihood of long, successful, happy, and even lucky marriages. Asian harvest is followed by India’s famous wedding season. As they figure out how much surplus income was generated from all their hard work during the growing season, they wisely plow some of their savings into gold. Starting in late summers, Asian farmers begin to reap their harvests.

#Autumn chase drivers

This gold seasonality is fueled by well-known income-cycle and cultural drivers of outsized gold demand from around the world. Instead gold’s major seasonality is demand-driven, with global investment demand varying considerably depending on the time in the calendar year. Gold’s seasonality generally isn’t driven by supply fluctuations like grown commodities see, as its mined supply remains relatively-steady year-round. Gold stocks display strong seasonality because their price action amplifies that of their dominant primary driver, gold.