Statistically Speaking Gold Should Have Been Strong In November – What’s Next?

December 4, 2013

gold1November has traditionally been a kind month for gold investors.  Since 2004 the price of gold during November (as measured by using the SPDR Gold Shares (GLD) as a proxy)  has been up 75% of the time with an average return of almost 5%.

As shown in a chart by @RyanDetrick, statistically speaking, the price of gold should have been up in November.

Instead of rising this November the GLD dropped from $126.95 to $120.70 for a price decline of 4.92%, the worst November for gold in 35 years.

GLD NOVEMBER

Conclusion?  Don't rely on historical data to make current investment decisions.  Gold is in a downtrend and the selling is so overdone that the current market price of gold is below the production costs of most gold miners.

When will the price of gold recover?  No one can perfectly time price moves, but markets that are brutally oversold can come screaming back in a heartbeat when sentiment changes.  Long term gold investors only need to remember one important fact - the Federal Reserve is committed to a campaign that will continue to destroy the purchasing power of the dollar thus making gold a solid long term investment strategy for wealth preservation.

DOLLAR PURCHASING POWER

Comments

By dg8231 on December 5th, 2013 at 10:06 pm

Why can’t you just acknowledge that the US government/US Treasury are manipulating the gold market. They have been for over fifty years and are still doing so today.

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