Saturday, March 26, 2011

Gold and US Dollar Seasonality

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As there are just three trading days left in the month of March, I thought it would be interesting to do a little sleuthing around the Internet to see what I could find out about the seasonality of gold and the US Dollar in the months of April and May.
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I continue to believe the US Dollar will fall next month and that gold will begin the parabolic conclusion of its ongoing C wave.  But does my belief collide with the known seasonal tendencies of gold and the dollar or, by chance, is my belief coincidentally in perfect alignment?  Read on because I think I have found the answer.
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Let's begin with gold. This chart is a collage of 4 different sources that offered their rendition of golds seasonality. I have drawn a red rectangle about the April/May time frame on each chart.
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The data suggests to me that the month of March is consistently a dud month for gold.  And, April / May are usually quite strong.
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Hummmm.... I'll take that as a positive.

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So what about the US Dollar?
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Well here is a chart illustrating a couple of renditions of the US Dollar seasonality.
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Well I'll be darned.  I honestly did not expect to discover that the US Dollar has a very strong seasonal tendency to fall off a cliff during the months of April and May. 
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I'm going to take that as a positive, too - as far as the immediate continuation of the gold bull is concerned.
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Well, there is my answer.  The seasonality for gold is very favorable in the months of April and May and the US Dollar seasonality strongly suggests the buck will continue to fall, and perhaps sharply.
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And just three more trading days to April.  I can hardly wait!
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5 comments:

  1. Great analysis John. This quarter has been a flat quarter for me with a big 18% dive right in the middle of it. Maybe the next 3 trading days will give some bankable profits. I am 100% mining stocks in 4 portfolios - so looking forward to the next 2 months

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  2. Hi john, me too!!It's always a huge pleasure and so great interest reading yours posts.We're all waiting for gold and silver to new highs.
    Thanks again.
    All the best from Italy.

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  3. Thanks for the encouraging words John!

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  4. John,
    Do you still see gold/silver reaching highs in Early May then experiencing major pullbacks at the end of the C-wave which according to Gary and yourself will happen the first or second week of May?

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  5. Hi Robert - the conclusion of the C-wave will cause a major pullback, to put it mildly. The timing you suggest sounds fine with me. The options I own are either June or July expiration as I do not anticipate the parabolic lasting that long (but we can always hope I am wrong). Thanks for your question.

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