Two short-term scenarios for Gold market

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At the beginning of May, the usual chorus began that gold was about to have its annual spring sell-off. Those voices included not only the anti-gold cabal, but also a number of commentators inside the sector.

The prevailing “wisdom” was that since gold always sells off in the Spring that it must do so again. As is usually the case in the market, there was no actual analysis of why gold tends to sell-off in the spring – and if those conditions were present this year.

There are typically two reasons which work in unison to generate a pull-back in the price of gold – from May through the end of August. Obviously, one of the bases for a pull-back is that gold typically has a large rally in the Spring, the culmination of the strong season for gold: from October through March. This year, there was no significant rally from January through March.

Tickers: GOLD