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Gold Weakness to Persist as Seasonal Factors Weigh
By: Almanac Trader | May 22, 2019

Gold tends to post seasonal bottoms in late June or early July (shaded in chart below), as demand increases when jewelers again stock up ahead of the seasonal wedding event in India. Gold prices are also subject to spikes in demand from the investment community, as a hedge or protection from concerns over inflation or during times of economic instability or uncertainty. It is valued in terms of the U.S. dollar, so periods of dollar weakness can support gold’s value. Uncertainty over trade and tariffs does exist and has existed for some time now. During this time inflation (official metrics) has remained subdued while gold has been trending lower. The trend of lower gold is likely to continue.



Shorting an August gold futures contract before Memorial Day and holding until the end of June has been fruitful in 29 of the last 44 years for a success rate of 65.9%. This trade’s best year was 2013 when stocks put up their best yearly performance in more than a decade. This trade has worked in 10 of the last 13 years.

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