SEASONAL GOLD

 

Seasonally, gold peforms as it does because of the Chinese and Indian wedding and festival seasons which provide a massive support of physical gold buying,

There are all sorts of charts you can look up but the one above provides a pretty good summation of stronger and weaker periods for gold - based heavily on the Chineses and India physical gold buying seasons.  That's about 3/8th's of the world's population that stores its wealth and passes it along from generation to generation in thre form of gold.

You can simplify this down to say that Feb thorugh June and into early July is the traditional weaker period.  August through January is the tradtional strong period.

Beyond this there is the eight year cycle with three strong up years and 5 down years that many technical analysts follow.  The beginning of the new technical up cycle is January of 2025.  Some eminent technicians like McClellan believe the yearly parameters are worth sticking to, others like Zulauf believe the upcycle has already begun here in 2024 and that it can last more than three years.

Obviously we've been in a strong upcycle since oct of 2023 and a pronounced upcycle since January of 2016.  And an overall upcycle since 2001 - and a permanent upcycle since Nixon took us off the gold standard in 1971.  Long term charts bear all of this out.

There are many secular factors that outweigh the Eastern festivsal and marriage buying season that affect these cycles.

First and foremost, without the gold standard the US has been free to churn out as much debt as it wants as it can always be paid back with printed dollars.

But a slew of secualr developments have had a huge effect on the gold price more recently.

Among them:

1. Central Bank buying has shifted heavily away from US dollars and towards gold especially in the last few yars.  This is because of A) the massive buildup of dollar denominated debt and B) the weaponizaion of the dollar through Tarrifs, Sanctions, and Confiscations.

2. Gobal Inflation fears which have exploded in about 2016 and went into overdrive after covid.

3. Faith in integrity, fairness, and competence of major Dollar/Euro/Yen driven governements that dominate western economy.

4. Fears of war, trade war and violence fueled by income inequality and the morally bankrupt demagogues seaking to profit from this inequality which has led the United States to the brink of civil war, while hot wars rage throughout the Middle East and Eastern Europe.

5. De-globalization which is a highly inflationary secular movement bound to last decades.

All of these trends are intensifying by the minute. 

But when you add these trends to a technical backdrop which is shifting powerfully to the advantage of gold and a coming commodity supercycle and you get the potential for a powerful upward move in the price of gold that could/should last at least through 2028.

Technically the better season is about to begin for gold after perhaps one more selloff to scare the weak holders out of their positions.

So you get the Eastern buying season somtime this fall and that coincides with the most extraodinarily incendiary election season since the 19th century with two of the most unpopular and underqualified candidates in the history of elections,

This  coincides with the beginning of the powerful 8 year technical upcycle in gold.

And add to this the most technically overbought stock market in history which can provide little competition for the hard assets market.

And you get perhaps the most powerful support for an upward gold move in our lifetime.

Of course, all of this could fail and gold could fall.  Nothing is certain in life.  

But the current odds are really in the favor of the gold buyer