LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Sell Gold in May and Go Away?



-- Posted Tuesday, 27 May 2008 | Digg This ArticleDigg It! | Source: GoldSeek.com

Gold is currently moving in volatile times and to me at least the debate on where it is going next looks increasingly polarized. While the hot money seems to have abandoned gold and silver to ride the crude oil bandwagon (which will certainly suffer the same drop soon), the old maxim “Sell in May and go away” seems to have been pinned to gold’s lapel.

 

The reason given is seasonal uncertainty but this May maxim is more associated with stock markets than gold and since the two markets are generally not correlated it seems strange to apply the saying to both asset classes. So how has the gold bull market done during the summer months? The last part of the saying ends with “and don’t come back until Saint Leger’s Day” which falls on the 2nd October.

 

Let us pull up the numbers between May 1st and October 2nd for the last 6 years.

 

 

Start Date

Gold Price

End Date

Gold Price

Difference

Percentage

May 2002

$308

October 2002

$321

+$13

+4%

May 2003

$334

October 2003

$384

+$50

+15%

May 2004

$386

October 2004

$417

+$31

+8%

May 2005

$431

October 2005

$468

+$37

+8%

May 2006

$655

October 2006

$596

-$59

-9%

May 2007

$673

October 2007

$747

+$74

+10%

 

 

So in the last six May periods we have gold up in five years and down in one year. The average percentage gain computes as 5.8% which is not shoddy at all for a five month period and if we exclude our negative year, it comes out at an average of 9%. So much for sell in May and go away for gold.

 

Now gold was at $851 at the beginning of May 2008. Applying our average of 5.8% brings gold to $900 by October. Using the 9% brings it to $927. You may not think that is good enough but if you are parking your wealth to avoid problems in other assets it may serve you well relatively speaking.

 

Looking at the context of May to October 2008, what could trump this scenario? Could this be a negative summer for gold like 2006? Though gold may come out positive, caution is required. I mentioned crude oil at the top and “top” may be the operative word as the world’s main commodity begins to finish forming a parabolic rise. There is only one way that parabolic rises end and that is with every one trying to hit the exit door with their profits at the same time – i.e. a sharp drop in prices.

 

Given gold’s historic correlation with oil, I cannot see gold forging very far ahead if oil is going thru a correction similar to what we are seeing for gold and silver since mid-March. This summer may yet prove to be a period where single digits gains in gold are something to be appreciated.

 

 

 

Further analysis of silver can be had by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain a free issue of The Silver Analyst and learn about subscription details. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk.


-- Posted Tuesday, 27 May 2008 | Digg This Article | Source: GoldSeek.com




 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.