Is Gold ready For A Summer Rally? ETF: GLD
Brooke Thackray’s 2009 Investor’s Guide states that gold has a period of seasonal strength from July 12 to Oct. 9. and has been profitable in 18 of the past 24 periods.
This trade during the three month period has outperformed the S&P 500 index by an average of 4.6% per period. Gold equity indexes ETF’s have a similar period of seasonal strength. The Philadelphia Gold and Silver Index (XAU) has a period of seasonal strength from July 27 to Sept. 25. The trade has been profitable in 16 of the past 24 periods and has outperformed the S&P 500 index by an average of 8.4% per period.
What has been the reason for this demand? One large influence is the Indian jewelry business. Indian jewellery fabricators need gold for the festival and wedding season that starts in October and finishes in November during Diwali. This year looks to be a good one for this, as the economy in India is booming
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With the US looking to spend its way out of the recession, and the past history of gold for this upcoming period, it may be worth a look. The SPDR Gold Shares (GLD) ETF holds physical gold and is the 6th largest holder of gold in the world. If the past could be used as a compass for the future, this could be a good avenue to explore. GLD is trading down today at $91.92 and has a 52 week range of $91.71 – $92.36. Click on the black and purple banner below for a completely free analysis on Gold by Market Club. The video will load immediately.
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