Gold is back in season

published 11 August 2017

Gold investors "should really like August and September", says David Yoe Williams on TheStreet.com. At this time of year the price often gets a boost as demand for the metal picks up. Jewellery becomes more popular as people begin to prepare for India's wedding season, while Christmas and Diwali also take place towards the end of the year.

China's New Year celebrations then follow early in January or February. Around two-thirds of annual gold production is used for jewellery, and Asia accounts for 70% of jewellery demand.

Gold tends to do well throughout this half-year. A study by Seasonax, the analytics and charting group, shows that over the last 20 years the gold price gained an average of 8.6% between 6 July and 24 February of the following year; over the rest of the year it struggles.

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This statistic is an interesting reminder that gold is a commodity as well as a store of value.But chasing seasonal patterns for quick profits is never wise. Investors should continue to hold 5%-10% of their portfolio in the yellow metal as insurance against financial crises and a return of inflation.

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.