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BARGAIN
BUYING
Use Seasonal Price Trends to Your Advantage
by Randal
Strauss & Jonathan
Kosares
USAGOLD-Centennial Precious Metals,
Inc.
June 20, 2007
 One
of the more intriguing curiosities of the current bull market in
gold has to do with the annual buying opportunity which seems to
crop up in the depths of the summer doldrums.
To make a long story short, gold
purchases made in June and July proved very profitable by
year-end, as shown in the annual price charts (see right) and
explained by our following evaluation.
As depicted in the graph below, the
end of a 20-yr bear market in gold was marked in 1999 and this new
bull market birthed in 2001.
20 Year Gold Price Chart
Secular Bear Becomes Secular
Bull
In focusing especially upon the
particular consistencies revealed during each of these past six
bullish years of the new trend we can snatch some semblance of
order and direction amidst the general noise.
Our first observation is that
despite straddling the very middle of the year, pricing patterns
in June and July have nonetheless, with near perfect consistency,
allowed investors the very latest-possible opportunity to buy gold
at levels still below the average annual price for that
year.
And the key point here is that one
needn't attempt to further refine their weekly or daily timing of
action beyond that which is obtained by blind action -- meaning, any
random assortment of purchases throughout June and July on
average proves to be a fruitful maneuver by year-end.
The simplicity of this seasonal
trend is a useful insight for bargain hunters. In fact, over the past
35 years, this trend holds on average, and over two-thirds
of the average annual gains have been registered between August
and December.
For the most-recent
six years, subsequent seasonal price-gains
registered from August until year-end for any random
assortment (i.e., average) of gold purchases made during these
special two doldrum months of June and July, as demonstrated from
2001 through 2006, have averaged 10.6 percent --
representing an impressive 25.4 percent when annualized
for the remainder of the year.
This certainly turns that old Wall
Street adage, "to sell in May and go away," completely
on its ear.
The accompanying annual price
charts tell the graphic story (see right)...
© 2007 Randal Strauss
& Jonathan
Kosares
USAGOLD / Centennial Precious Metals, Inc.
Editorial Archive
Disclaimer: when
considering any market analysis, bear in mind that
past trends do not necessarily guarantee future performance.
Contact
Information
Michael Kosares, Proprietor
Centennial Precious Metals
PO Box 460009
Denver, Colorado 80246-0009
www.USAGold.com
1-800-869-5115 USA
1-800-294-9462 Canada
00-800-2760-2760 European Union
0011-800-2760-2760 Australia
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