Tags: gold | metals | prices | rally

Gold Could Be Due for a 'Seasonal Rally' in Second Half of 2015

By Thursday, 02 July 2015 11:15 AM Current | Bio | Archive

As we close the first half of 2015, gold is down about 2 percent, but the second half of the year is gold’s season to shine.

According to a new report from Bank of America Merrill Lynch, gold tends to reach an annual bottom around the middle of the year (sometime between June 15 and July 15).

In 25 of the last 27 years, according to the report, gold staged a late summer rally, thanks partly to the Indian festival and wedding seasons, when gold jewelry fabrication is an important industry supporting gift-giving in India. During these summer-to-fall rallies (usually July through November), gold has gained an average of 14.9 percent.

Some traditional investment firms are catching on to this seasonal surge idea, so they are coming out with some bullish second-half price projections. RBC Wealth Management metals strategist George Gero told CNBC’s Jackie DeAngelis recently that gold is “oversold” and due for a rally. He blames gold’s recent flatness on a healthy stock market, a strong dollar, uncertainty over a Fed rate hike and unrest in Greece.

For prices, he says, “we are probably going to see a median price is somewhere around $1,230 to $1,250.”

Ronald-Peter Stöferle, an advisor to Austria’s Erste Group (First Group) of banks, said in his Gold Report 2015 that gold may not have reached its bottom yet but he recommends gold since stocks are too high and gold is too low: “U.S. stocks are trading at generous valuations in comparison to historical levels. When a mean reversion occurs, gold’s characteristics as a portfolio hedge will come to the fore. As is always the case with insurance, it is better to have it and not need, than to suddenly find out that one needs it and doesn't have it.”

For the next 12 months, Stöferle is forecasting a price range of $1,200 to $1,250.

U.S. investors seem to be returning to gold. In the week ending June 25, investors added 6.9 metric tons of gold (via gold-backed exchange traded funds), the most of any week since February 2, according to Bloomberg.

As of June 25, assets in gold ETFs had risen in seven of the previous eight days, rising from their lowest level since 2009.

The purchases were prompted by “continued worries related to Greece and investors returning to ETFs,” according to Ole Hansen, head of commodity strategy at Saxo Bank.

About the Author: Mike Fuljenz
Mike Fuljenz is a member of the Newsmax Financial Brain Trust. Click Here to read more of his articles. Mike's books, media appearances and newsletters about gold and rare coins have won Best of the Year awards from the Numismatic Literary Guild and the Press Club of Southeast Texas, and he received the NLG's coveted top honor in 2013, "The Clemy Award."

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As we close the first half of 2015, gold is down about 2 percent, but the second half of the year is gold’s season to shine.
gold, metals, prices, rally
Thursday, 02 July 2015 11:15 AM
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