Gold’s pullback could last until after Election Day

Charts, Commentary, Gold, News, Technical Analysis


Since the start of 2016, gold has been outperforming, advancing nearly 30% through late July. Even after last week’s 5% loss, gold is still up over 18% year-to-date based upon continuously-linked non-adjusted front-month futures prices (used in all charts below). Using data from 1975 to 2015, gold’s average annual gain has been just under 7% in all years. In election years, gold has been substantially weaker, averaging a loss of 2.8% since 1975. Gold’s performance this election year has been well above average.

Removing 2016 from the above chart we are left with gold’s 1-year seasonal pattern in all years and in election years (below). Brief seasonal weakness is shaded in yellow. Early October declines tend to persist and lead to a lower low in November before gold rebounds to finish the year higher in “All Years.” In election years, gold’s October decline has been greater in magnitude, but shorter in duration with the rebound beginning near the end of the month.

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Stock Trader's Almanac (1285 Posts)

Jeffrey A. Hirsch is Editor in Chief of the Stock Trader’s Almanac. His latest book "The Little Book of Stock Market Cycles" (Wiley) was published in August 2012. As a frequent participant in the MrTopStep IM-Pro Trading Room, he shares trading insights with our other professional traders and new traders eager to experience the power of collective intelligence. Join us today and get the edge only social trading can give you.

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