From the Commodity Trader’s Almanac 2013, it is known that gold usually posts a seasonal bottom in July or August, but the normal supply and demand cycle can be heavily influenced when the investment community is concerned about economic stability and/or future inflation. This was the case when gold last traded at a record high in September 2011. Since that peak, gold has been on a wild ride lower and the stocks of the companies that mine and explore for gold and silver have followed a similar path.
In the following chart, the 1-Year Seasonal pattern of the Philadelphia Gold & Silver Index has been plotted over the past 5-, 10- and 20-year periods. Year-to-date performance, through yesterday’s close, is included for comparison. Historically, this index also typically bottoms in the June to August timeframe. If physical gold and the Philadelphia Gold & Silver Index fail to take out their respective highs from March soon, the bottom for both has likely not been reached yet.