Even paying July/August's top price for gold has averaged 5.1% returns
by New Year's since 1968...
It's a hardy perennial for anyone studying the gold market. And with the British
summer being more like November this year, very hardy perennials are just what
is needed.
Greener than George Monbiot's socks, we're happy to recycle this fact yet
again. The gold price tends
to display a seasonal pattern - rising in spring, slipping or flat-lining in
summer, only to rise once more in the fall and then winter.
No, the pattern was shot in 2011 as
we noted last July. But such profitable "summer sales" have occurred
most frequently during longer-term bull phases, as we told the Financial
Times in 2009.
For Dollar investors, buying
gold even at the highest price in July or August has only failed three
times to deliver a gain by year's-end since this bull market began in 2001
(extending a pattern we
noted in 2010. Lehman's collapse threw
2008 out of sync). Indeed, buying gold regardless of price in July or
August has paid off 20 times in the last 44 years all told - and delivered
an average 5.1% profit even with the losses included.
Now, this is hardly the way to time a serious move into gold. Buying regardless
of price? Just because history says the summer average rewards it by year's
end?
Viewed as crisis insurance, however, gold comes at a cost - your premium being
the price you pay when you take out your policy. Sensible home economics says
you should look for best value. Only here, cutting your premiums needn't void
your insurance.
Sure, the gold price could
well go cheaper from here. But if it doesn't, and people scramble once more
for the security,
liquidity and diversification only a lump of rare yellow metal can bring,
then the current lull could be offering insurance at summer sale prices.
And so far this year, gold's summer sale is looking utterly typical.
Formerly City correspondent for The Daily Reckoning in London and head of
editorial at the UK's leading financial advisory for private investors, Adrian
Ash is the head of research at BullionVault,
where you can buy gold today vaulted
in Zurich on $3 spreads and 0.8% dealing fees.
About BullionVault
BullionVault is the secure, low-cost
gold and silver exchange for private investors. It enables you to buy and sell
professional-grade bullion at live prices online, storing your physical property
in market-accredited, non-bank vaults in London, New York and Zurich.
By February 2011, less than six years after launch, more than 21,000 people
from 97 countries used BullionVault,
owning well over 21 tonnes of physical gold (US$940m) and 140 tonnes of physical
silver (US$129m) as their outright property. There is no minimum investment
and users can deal as little as one gram at a time. Each user's unique holding
is proven, each day, by the public reconciliation of client property with formal
bullion-market bar lists.
BullionVault is a full member of
professional trade body the London Bullion Market Association (LBMA). Its innovative
online platform was recognized in 2009 by the UK's prestigious Queen's Awards
for Enterprise. In June 2010, the gold industry's key market-development body
the World Gold Council (www.gold.org) joined
with the internet and technology fund Augmentum Capital, which is backed by
the London listed Rothschild Investment Trust (RIT Capital Partners), in making
an $18.8 million (£12.5m) investment in the business.
Please Note: This article is to inform your thinking, not lead it.
Only you can decide the best place for your money, and any decision you make
will put your money at risk. Information or data included here may have already
been overtaken by events - and must be verified elsewhere - should you choose
to act on it.
Circle Us