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Entering the Strong Season for Gold


Gold typically displays a seasonal tendency to be strong in the fall and spring and experience its weakest months in the summer.

In 2006 gold stocks made a June bottom, but volume coming into them dropped off to start September and it wasn't until October that buying pressure sustained itself higher.

In 2007 buying pressure in gold stocks picked up and continued right at the start of September after an August selloff.

In 2008 the summer doldrums led into the fall financial crisis and panic selling in the gold stocks. The down volume actually started in March when gold topped and continued all the way until November.

In 2009 it was very obvious where the buying pressure picked up as you can see on the chart immediately when September started the volume jumped up dramatically. In the summer months there was no pickup in volume and thus the choppy action sideways.

2010 was different than previous years in that the pickup in buying pressure actually started in August instead of waiting until September.

This year so far the bottom in buying pressure has actually been in May even though gold stocks made a lower low in June. If the trend higher in buying pressure has started this early then there's a chance June has seen the lows of the year.

An early bottom for gold stocks to start the second half of the year would align well with the fact that gold stocks performed so poorly to start the year compared to the price of gold. It's just going to depend on whether money flows into the sector now or waits a couple more months for the seasonally strong period to start.

Editor's Note: This article was originally published on

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