The New Year Gold Rush

[Modest Investor]

The New Year Gold Rush! Can it be that gold has seasonal trends? I looked at some figures I had from 2006 to 2016, calculated the average price and then plotted this on a graph.In fact in the period from 1st January until the end of February the average price increase was 5.75% and occurred in 9 out of 11 years. I set out to further research and refine this trade.

Having looked at some charts I realised that just by getting in 2 days earlier on the 2nd last trading day of the year, this might improve performance. And so it did. In fact during this period it increased our average return to 6.74%.

Anyone else attempt to trade seasonal variations in gold or commodities?

 

[timsk]

Hi MI,
Interesting observation!

I'm curious as to why you picked the decade you did and what the results would be if you included data right up to 2022 or, even, 2023 in few weeks time? Also, if the penultimate trading day of any given year is the best time to get in to capitalise on the new year gold rush, does your analysis indicate the best time to sell for swing traders not wanting to hold for a long term investment?
Tim.

 

[Modest Investor]

Hi MI,
Interesting observation!

I'm curious as to why you picked the decade you did and what the results would be if you included data right up to 2022 or, even, 2023 in few weeks time? Also, if the penultimate trading day of any given year is the best time to get in to capitalise on the new year gold rush, does your analysis indicate the best time to sell for swing traders not wanting to hold for a long term investment?
Tim.

Thanks, apologies for delay in getting back . I jusr had this data from awhile back, but yes should have juts repulled it. Last 5 years aren't so successful.

I believe that seasonality can be used alongside other metrics such as RSI and moving averages for swing trading.

To get up to date I then took data for the last 5 years too and came up with the following.

Full article here: https://moneysandi.com/the-new-year-gold-rush/