Peaks & Valleys: Why Short-Term Gold Market Fluctuations Shouldn’t Worry You

Posted on October 24, 2014 @ 11:27 AM EST

Did you know gold's value can change depending on the month? It's true!Have you ever heard the saying: “The best way to judge a person’s future behaviour is from their past behaviour”? If someone tends to act out in certain situations, you should pay attention to that. Let’s say you bring a friend out to a movie, and he likes to play on his phone throughout the film. You would stop being surprised the second and third time it happened, and probably stop inviting him altogether after that. Or maybe you have a friend who genuinely really appreciates it when you lend her a hand with her homework. You’d probably help her out afterwards because you’d expect that same surge of friendship and appreciation. Investors take this logic one step further: They look at financial markets and examine how they behave. They then make financial decisions based off certain factors. For instance, let’s say there’s a company that releases a new version of their product every year at around the same time. The release date will often cause the company’s stock to rise, and then it’ll slowly decrease all year round. The smart investor tracks this pattern and takes advantage of the low points so that he or she can benefit at the high points. But can Canadians looking to take advantage of the services of mail-in gold buyer make similar choices? The answer is yes, but there are some complications to be aware of. Specifically, the gold market has fluctuations that can confuse investors and cause issues. Luckily, many of these dips and falls can be easily tracked and explained. We help investors understand what these peaks and valleys mean, and how you can plan around them.

What Are Gold’s Strongest Months?

 Gold is at its highest value during the months listed aboveThe strongest months for gold are August, September, November, December and January. The end of summer sees gold turning in strong numbers, and then it resurges again before the beginning of winter and through Christmas. Finally, gold investors can ring in the new year with some great news as gold surges once again. If you’re planning on using the service of mail-in gold buyers, your jaw might hit the floor when you see these prices. But is it just a fluke?

How Reliable Are These Months?

You might be wondering how common or reliable these surges are. You may worry that this might be the case for a year or five, and then fade away. However, this pattern has remained consistent since the 1970s. For decades on end now, gold has surged during the above months. It is important for investors to remember that these are temporary raises and do not speak to long term trends and conditions in the gold market. Mail-in gold buyers will not always offer these prices. Instead, remember that these sudden changes are up and down and are not something that will last beyond the month. This will lead to a far more secure financial strategy.

What Are The Weakest Months When It Comes to Gold?

As the calendar passes by, gold's value can rise and fallWhile the weak months aren’t as extreme as the strong surges in gold, investors can track and measure dips throughout the year. March, June, and October are historically very weak months for gold, and you can expect to see sudden and inexplicable drops during this time. While this can be a good time to buy in, it isn’t necessarily an event that demands you change your entire investment strategy. These dips also don’t mean that your long term investment has gone to waste. In some cases, the ups and downs can be quite dramatic – August and September show big highs, then they drop down in October only to recover in December. It’s easy to see how someone can become rattled by such drastic changes, but an analyst who has watched the market for several years can predict and track these changes with ease. If the customers of mail-in gold buyers simply sit and wait it out, they’ll be relieved to see numbers recover and even spike during these times.

What Can Investors Learn From This Information?

Understanding the natural rises and falls in the gold market is important for investors for a few reasons. First, it gives you a better idea of when to buy and when to sell. While it shouldn’t dictate your plans, you can align your time table slightly to be more favourable. For instance, if you were planning on selling in October for a long period of time, you might delay that into December so that you can enjoy a higher return. On the other hand, gold works best when it is invested over a long period of time, so you shouldn’t sell early to try to take advantage of one of these profitable months. Remember, this is a yearly event, so it may be wise to hold off and let things develop further. This is also a helpful reminder not to panic over the small dips and dives in the market. Sometimes factors as small and seemingly random as the month can change your investment; that doesn’t speak to the strength of gold. Be smart and keep an eye on the market, but also trust in the inherent value of gold.

Gold sellers  who are watching the market may be confused at the dips and curves that occur during certain months. The information above should help you understand exactly what is going on and how to handle it.

Are you looking to buy or sell gold? EDI Refining has been helping North Americans buy and sell gold in a straightforward and trustworthy manner for many years. For more information on the precious metals market and how you can invest in it, check out our blog for insightful looks at all aspects of gold and its financial value.