The month of September has historically been the strongest for precious metals. Since the start of the current bull market, gold has averaged a gain of 2.6% during the month of September. This is typically followed by a smaller gain of 0.8% in October and then a few more strong months in November, January and February. Taken together, we are exiting the weakest seasonal period for gold (Spring-Summer) and entering into the strongest seasonal period (Fall-Winter).

The following chart has been updated to include data through September of 2014:

Of course, seasonality is just an average and not a guarantee that past performance will repeat. However, physical buying typically increases during the back half of the year as India’s festival and wedding seasons kick in. Chinese purchases also tend to increase toward year-end. Traders take cues from these seasonal numbers and create additional buying momentum.

I believe it is wise to hold physical precious metals in your possession, especially as the geopolitical instability spikes and de-dollarization accelerates. This may be an opportune time to buy before gold and silver move into their strongest seasonal months. Despite the lack of action over the past few years, gold’s fundamentals remain strong and signal plenty of upside ahead.

In addition to holding physical bullion in your possession, you may also want to consider holding a few of the best-in-breed junior mining stocks. The greatest gains during uplegs can be found in this very volatile sector which is currently undervalued. In fact, mining stocks are offering some of the best entry points (relative to the metals) that we have seen during this entire gold bull market.

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By Jason Hamlin

http://www.goldstockbull.com/

Jason Hamlin is the founder of Gold Stock Bull and publishes a monthly contrarian newsletter that contains in-depth research into the markets with a focus on finding undervalued gold and silver mining companies. The Premium Membership includes the newsletter, real-time access to the model portfolio and email trade alerts whenever Jason is buying or selling. You can try it for just $35/month by clicking here.

All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. The information on this site has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any information on this site without obtaining specific advice from their financial advisor. Past performance is no guarantee of future results.

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