“GLD Sees Its Seasonal and Fundamental Forces Unite!

The recent moves in the gold markets have shown investors are increasingly seeking protection from an unpredictable global economy. This can be seen in the continued demand for gold-backed ETFs as a safe haven asset. However, a new analysis looking at the fundamentals and seasonal trends of gold suggests this market could be ready to take off in the near future. In a report released by the London Bullion Market Association (LBMA), researchers looked at the potential for a significant move in gold prices over the coming months. This report covered the fundamental factors driving the gold market, as well as the seasonal trends which suggest periods of higher and lower volumes and thus, higher and lower prices. The researchers found two key factors that may be influencing gold prices; the fundamental factors and seasonal trends. On the fundamentals side, the LBMA noted that gold is a sound store of value, becoming increasingly attractive as concerns over the strength of the global economy and currency continue to increase. The other factor the LBMA researchers noted was seasonal trends. The report found that typically gold does well during the summer months, prior to the later months of the year when investors tend to want to move out of the markets and into cash reserves. Thus, the concentration of gold buyers and sellers usually decreases, creating an environment where prices can be more easily pushed in one direction or the other. This implies that the price of gold could be set to rise in the short-term. With the fundamentals and seasonal trends both converging on the gold market, it is possible that we may see a significant move upwards in prices. As such, investors may want to consider increasing their exposure to the gold markets in the coming months in order to take advantage of any potential short-term gains.

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