Tuesday, 19 June 2012

Most years since 1999, buying Gold in June or July and holding til year end has been a profitable idea

Gold has made a significant low in either June or July in 9 of the past 13 full years. Those 13 full years take us back to 1999, when the current Gold bull market began. By significant bottom, I mean a bottom that held for the remainder of the year (at least). Most of those significant bottoms lead to a big rise through to the end of the year in question. The number of June or July significant bottoms rises to 11 out of 13 if you include 1999 and 2005, and there is a fair argument for including those years, as will be illustrated below.

The first chart shows the Gold bull market so far. I say "so far" because I believe that the end of the bull market will be preceded by a parabolic blow off top. To date, the gold bull market has been orderly and steady. My belief may be misguided, but it is based on my observation of other large gold and commodity bull markets - blow off tops are common, almost mandatory.


The following sequence of charts shows a weekly candlestick chart for each year from 1999 to 2012, to illustrate the significant bottoms in each year.

1999 bottomed the week of August 23, only 30c under the week of July 19 bottom. That August low marked the beginning of the current Gold bull market:



2000 bottomed the week of October 23:



2001 showed a significant bottom in the week of July 30:



2002 showed a significant bottom the week of July 29:



2003 showed a significant bottom the week of July 7:



2004 bottomed in May and showed a significant bottom in the week of July 26:



2005 showed a significant bottom in July, ruined by the spike low in September. That spike low does not show up for all data providers, so I am not sure it truly happened, or what the full story was:



2006 showed a significant bottom the week of June 12:



2007 showed a significant bottom the week of June 25:



2008 bottomed in October:



2009 bottomed in January and showed a significant bottom in July:



2010 showed a significant bottom in July:



2011 showed a significant bottom in June:



2012, what does the remainder hold? Nobody knows.