Seasonal Gold Charts

Seasonal gold charts are important because they will let us know exactly where we are in terms of seasonal price bias. Lately there's been an absolute all out campaign in the media to jawbone investors away from gold and especially gold futures. Why buy options in GLD or any derivative ETFs when you can buy options in actual gold futures contracts and take delivery? Hmm? I ask you.

Stockcharts.com server was down, so I had to look at other sources for the answer. The rally in gold IS NOT FAKE. Gold miners confirm the rally, so remain confident.

Look at the seasonality in the following gold chart. It says mid-September is the rally point. Options expiry is next week.

Now look at the following chart, which shows a seasonal bias for the mid-September seasonality, that even during major corrections in the gold bull market, the gold price rallied. Look at every year and follow the black seasonal bias line:

Bigger chart: http://www.flickr.com/photos/11747277@N07/3904815767/sizes/o/

You can see gold prices have a major move ahead of it, and in the next two weeks should see another rally. Note also that the overall COT numbers are widely spread apart, and that they are likely to stay that way for some time. Not until the COT numbers are close together, as they were in year 2000 at the bottom, can we say that the gold bull market is done.

Opinion on Barrick

My opinion on write downs in hedge books is that large copper producers like Barrick will likely have resorted to using "gold equivalent ounces" as hedges rather than gold and are writing those down now, because COPPER prices are bound to decline.

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