I have argued in a few previous commentaries that there are no longer real “seasons”in the precious metals sector, at least not the same, rigid patternswhich were previously in place in this market for a considerable numberof years.
Theannual “cycle” for the precious metals sector would begin in the fall,with the commencement of important Indian religious festivals. Asmany/most know, India has been (by far) the most prolific buyer ofprecious metals for many years. However, the explosion in preciousmetals buying in China (due in large part to a rapid loosening ofgovernment restrictions on ownership and trading) means that China is inthe process of passing India as the new #1 market for gold and silver.
Inprevious years, as the Indian religious festivals came to an end, its“wedding season” began – an even more traditional time for the buyingand giving of gifts (generally of gold). This meant that the “strongseason” for precious metals was typically from early in September toearly in April, with the possibility of mini-corrections in between –during lulls in Indian demand and/or an escalation of bankstermanipulation in the sector.
This“strong season” for gold meshed with the general market tendency to“sell in May, and go away”, a market axiom based solely on the fact thatmore traders are on vacation during that period of the year – and thusvolume (and volatility) tend to diminish considerably. This patternoften led to a significant sell-off in late spring, followed by a fourmonth trough before the next “cycle” began...
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