Gold Season is Upon Us
Hello everyone, and good morning. This is my first forray into the Fool blogging world, so please forgive any glaringly stupid mistakes I may make.
With that said, I'd like to talk about gold, and seasonal trends. As many of you may well know, August is historically the worst month (demand-wise) for gold. However, it leads us into the gold demand bull season starting in September (India).
Given this information, there are several questions that I would like to discuss with the Fools out there (thank you in advance for your answers and time):
1. I'm not sure how well India is doing (I haven't followed it closely enough to make a claim here), but with the global slowdown, and the higher price of gold than in previous years, will demand be as great as it has been in the past?
2. I wanted to play this trend with some of the miners, but rises in gold in previous years have not translated directly into profits for the many of these stocks. Investing in the physical asset has been a much better play. If gold continues to rise, can we expect the miners to catch up? After all, they are supposed to be leveraged bets on the price of gold.
3. We seem to be peaking here, and I feel that a big leg down might be in the works (unless Bernanke gets to the choppa [which he should not do!!]). So I feel that even if gold goes through the roof, if the market tanks it will pull down everything around it, including the miners. So I'm in a little dilemma here, will the gold price jump enough to counteract the downside forces of mr. market on the miners? Of course the market might not go down at all, and gold might not go up, so feel free to let me know what you think.
I hope these questions spark some good debate, and thank you all for reading!!