Hey Shard,
Looks like a nice little profit you've made there.
Can you give some advice on gold investing?
I can't remember exactly what you said about it.
Which time is the best time to buy and sell?
I have been thinking about it for long term investing (6mo or longer)
Thanks
Thanks, cant complain.
Lately Ive been having a lot of success implementing my technical trading strategies for scalping when the North American markets are closed. Doing it during trading hours would be suicidal I think!
As with everything, discipline is the key.
Gold trading (as part of commodity trading in general) is an excellent complement to forex trading. Gold has an inverse relationship to the USD, so if you have your finger on the pulse of what is going on with the US economy, what direction the dollar is heading, etc., you can capitalize on trading Gold appropriately as well, ideally making money both ways! Whenever significant US news comes out, Ill watch Gold as well as the USD and trade accordingly. Through CMC I have access to Gold Futures contracts as well as Spot, so I can actually buy contracts (essentially ounces of gold) outright as opposed to buying a fund, stock, ETF or some such investment vehicle which focuses on Gold. I prefer dealing with the actual commodity because of fundamentals. Gold is gold. Sure, I can buy Barrick Gold or GoldCorp, but it doesnt really matter what the price of the underlying commodity is if one of these companies announces an accounting scandal...
As for when to buy Gold, as I alluded to before, look at the overall macro picture of the US economy with regards to the USD. You need to be aware of the current conditions obviously.
But past that, regardless of what is happening on a macro scale, Gold does exhibit distinct seasonality every year. I cannot comment on the US Gold sector, but here in Canada where it is much larger (and hence where I focus my efforts), seasonality for Gold occurs between (roughly) July and September of every year. Just look at a 5-year or 10-year chart for Gold, ETFs such as XGD, etc., and youll see a definite pattern. In fact, out of the last 10 years, during the period of July-September trading the TSX Gold sector has been profitable 9 times with an average return per period of 16.6%. The commodity itself has seen returns in the neighborhood of 6% every year for the past 10 years during this period as well.
As for factors, there are many. Gold producers typically report their strongest results and earnings during the 3rd and 4th quarters. Gold also strengthens when gold fabricators purchase gold to make jewelery for the Xmas season and Dhaliwal season. (India is the largest consumer of gold in the world and the Indian wedding season is peak when it comes to gold demand!)
Knowing these types of factors is key to seasonality and this applies for any and all sectors. For the IT sector it is September to January, averaging 15.9% gain each of the past 10 years. Reason: the fourth quarter is the strongest revenue and earnings quarter. Consumer electronic sales prior to Xmas also impacts this, and the climax is often seen with the CES in Vegas every January. Healthcare, same thing key conferences are in September (oncology conference) and January (JP Morgan health conference). This sector has a history of reaching a seasonal high just after the JP Morgan conference. In addition, there is always a higher frequency of drug approvals prior to year end. Period of seasonal strength? For the TSX, its the end of November until the end of February, averaging 7.5% gains each year for the past 10 years (7 out of the 10 have been profitable.) For the S&P its August until January...
Anyway, I could go on and on. Hopefully this has been of some help.
