It’s October and it’s a significant month for gold

There is a good time to invest in gold and there is terrible time to invest in gold.

While gold is usually considered a hedge against inflation, there are other, very specific times of the year, when traders pile in to profit from the yellow metal.

This week, I’d like to explain the links between India, the month of October and lusty gold.

So here’s something you may not have known about the shiny metal…

It can be argued that, over time, the gold price has become quite predictable for a very specific reason.

In fact, since it became legal in the US to own physical gold in 1975, September has consistently been gold’s best performing month. But why?

September is the month when traders start buying ahead of India’s festivals and wedding season.

This is why October is a great month for gold.

Gold demand in India usually picks up in the run-up to the festival and wedding season that runs from October to December.

The quarter ending in December typically accounts for about a third of India’s gold sales, since it includes the start of the wedding season and festivals like Diwali, when buying gold is considered auspicious.

Gold is India’s biggest import item after crude oil, and the country’s jewellery industry is the world’s number one importer, ahead of China.

Two-thirds of gold demand in India comes from villages, where jewellery is a traditional investment.

Even the World Gold Council (yes there is a council for gold, too) expects demand to rise this quarter.

Just recently they were quoted as saying: “India’s gold demand may rise in the second half of 2016, after falling to the lowest in seven years in the first half, as monsoon rains spur rural demand during the peak festive season”.

If gold buying was a sport India would be a top ranked team, without a doubt.

I’m not a gold investor by any means, but I do like to make a profit.

The seasonality of gold has become so predictable that I always have a dabble at this time of the year – always.

In fact, I have recently bought a local gold stock as well as the NewGold exchange traded fund, just to have a line in water.

There are many ways to get exposure to gold.

From local gold stocks and exchange-traded funds, to trading dollar-based gold futures contracts through an offshore trading account.

Whatever method you use, I think there’s money to be made.

I expect gold to move higher from this month right through December.

In case you missed it, I am putting together a free seminar for locals where we’ll talk about all things investing.

I’d love to meet my readers, so if you are interested, simply email to benonicitytimes@caxton.co.za and book your spot.

I look forward to hearing from you.

Also read:

Dig your investor claw into any country

The enigma around September stocks

Refine the way you think about oil

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