From Kitco News
September is usually a seasonally strong period for gold due to buying ahead of a number of major gift-giving holidays around the world.
There is the autumn “wedding season” and Diwali festival in India, followed by Christmas and Hanukah in a number of nations, then the Chinese New Year in early 2014. Further, Indian farmers often look to gold when they sell their crop after the harvest.
All of this is especially significant since India and China are the two largest consumers of gold.
Still, some analysts cautioned not to automatically expect the normal seasonal strength since there are a number of unknowns, such as the impact of efforts by the Indian government to restrict gold imports and what Federal Reserve policymakers will do with quantitative easing when they meet next month. Also, some say, the seasonal strength from early autumn to year-end historically has not been as strong in years when gold was in bearish periods, and the metal is down so far in 2013.
Still, that seasonal strength has been on gold’s side in recent years.
“You tend to get a low in August and then you get (strong) demand much later in the fall,” said Jerry Toepke, editor of publications for the Moore Research Center, Inc. “September then normally becomes a very dynamic month in the gold market.”
For instance, several observers, said jewelry manufacturers start buying gold ahead of the coming holidays.
“There are several quantifiable seasonal moves for that period,” Toepke said. “There is one ongoing already. We have found that (Comex) December gold has closed higher on about Sept. 22 than (it has on) Aug. 2 in 13 of the last 15 years. The average move is $3,777 a (futures) contract.”
Further, he continued, the firm’s research shows that December gold finished higher on Oct. 1 than it did on Sept. 10 in 14 of the last 15 years and in 21 of the last 24 years.