Gold’s Seasonally Weak Period Begins in February

Charts, Commentary, Gold, Metals, News, Technical Analysis

Seasonally, there is a weak price period for gold from late-February until late June or early July. Entering a short position on or about February 20 and holding until March 15 has been a successful trade 27 times in the past 44 years for a success rate of 61.4% with a cumulative profit of $45,140 per futures contract. However, in recent years holding onto the short position established in February longer has been the more profitable trade.


The chart above is a weekly chart of the price of gold. The line on the bottom section is the 44-year average seasonal tendency showing the market’s directional price trend with seasonal weakness highlighted in yellow. Gold has enjoyed a solid rally since mid-August of last year when it traded under $1200 per ounce up to early February and nearly $1325 per ounce. That rally is beginning to show signs of faltering.

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As always, please use protective buy and sell stops when trading futures and options.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.

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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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