Some Color: Since 1975, the second quarter of the year has been by far gold’s worst—with returns dead flat over the 41-year period—and this year has been no exception, with gold down about 1%. On the flip side, the third quarter has been the best, outperforming its closest rival, Q4, by a whopping 40%.
Given the clear seasonal patterns gold has exhibited over the past four decades, investors can use these trends to make strategic purchases when the market is the weakest.
The GLD fell to new 2018 lows yesterday under heavy selling pressure. The index retested its 40 week moving average, which had previously held a major low last December, during Monday’s sell off. This morning Gold is rebounding nicely and may be in the early stages of a powerful new rally leg. The seasonal patterns are certainly in line for this.
At time of publication we are long GLD in some managed accounts.