Market Overview: Gold (GC)

Gold is classified as a yellow metal with a variety of uses. Not only does it have excellent industrial properties, it also has been considered one of the safest places to hold your money in times of financial or political uncertainty. As an old saying says, "gold will always be gold."

Gold is a vital industrial commodity. It is an excellent conductor of electricity, is extremely resistant to corrosion, and is one of the most chemically stable of the elements, making it critically important in electronics and other high-tech applications. Gold's industrial uses include applications in the dentistry, space, defense, and electronic industries. Gold is primarily used, however, for jewelry and for the production of gold coins.

South Africa is the world's largest supplier of gold accounting for over 50%. Russia is the second largest producer, with Canada and the U.S. at third and fourth respectively.

Seasonal Overview:

Since the demand for Gold is closely tied to the production of jewelry, Gold prices tend to increase during the times of year when the demand for jewelry is the greatest. Christmas, Mothers Day and Valentine's Day are all major shopping seasons and hence the demand for metals tends to be strong a few months ahead of these holidays. Also, the summer wedding season sees a large increase in the demand for metals, so price strength in March and April is not uncommon. The worst time of year for Gold prices is November, December, January and February when prices tend to decline and jewelers have holiday inventory they want to unwind. With Gold prices in a 15-year downtrend, most of the seasonal analysis points towards lower prices.

Gold: (High: Jan//Low: Jul or Sep) Demand is usually weakest in Northern Hemisphere summer, especially August when European jewelry manufacturers are essentially shut down. Demand is greatest going into fourth quarter, during which consumption is highest as gift-giving peaks beginning with Indian harvest and wedding festivals in autumn and carrying through US religious holidays and Chinese new year.

Chart courtesy of Moore Research Center, Inc.