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Indian traders sent gold prices higher with the Indian wedding season and firming overseas trends though the price may really make gains in the fall.
Global demand for gold continues to increase, and though the prices have not skyrocketed in the past few weeks, they certainly have not plunged nearly 30 percent, like silver.
Indian traders have recently sent gold prices higher with the Indian wedding season and firming overseas trends, though if previous years are any indication, the price should really make gains in the fall.
“A lot of people like to correlate the fall to the Indian buying season. India is a massive consumer of gold and that’s their wedding season so there’s a coinciding of that but also the investing trend in the US in general is that you tend to have a lot more in the way of news for whatever reason in September, October November and there seems to be a lot more going on, a lot more happening,” said Jonathan Kosares, Account Executive for USA Gold in a phone interview with Gold Investing News. Kosares is also the author of a yearly study put out by USA Gold about the seasonal trends of gold price.
According to Commodity Online, the reason is people have said goodbye to recession and they have come out in hordes to buy gold on the occasion of Dhanteras, an auspicious time to make new purchases for Hindus in India.
“It’s interesting to see what has happened in all those years. If you aggregate those first five years, basically you had 11.8 percent gains in gold in the last five months of the years, which annualizes to 28.23 percent,” said Kosares. “Even though you had a major outlying year in 2008 where it was actually down about five percent, you still managed the same aggregate percentage over the past 4-5 year period.”
According to this article, the combination of the escalating sovereign debt crisis in Europe, the unknown future of the Federal quantitative easing program, the ongoing debt ceiling debate, the early warning signs of inflation, especially in food and commodities and ongoing geopolitical instability promise to make the second half of 2011 very interesting for the gold market.
“Whether or not a meaningful pullback will manifest in the next two months is unknown, but the past ten years do make one thing abundantly clear: If you’re looking to add gold to your portfolio, taking advantage of the summer doldrums can be a reliable and rewarding strategy.”
