September 22, 2023
“GLD: Where Seasonality and Fundamentals Meet
As investors pour more money into the gold market, it has become increasingly apparent that seasonality and fundamentals are converging. Gold is traditionally seen as a safe haven during times of economic turmoil, as it is seen as a hedge against inflation, or the devaluation of paper money. This has certainly been the case with the current market, with investors seeking out the precious metal as a safe haven as economic concerns continue to linger.
In addition to economic concerns, more investors are taking note of seasonality when buying and holding gold. Historical data has shown that gold tends to rise in value during periods of increased investor sentiment. More specifically, gold prices typically peak during the summer and winter months.
The combination of seasonality and fundamental factors are, therefore, creating a convergence in the gold market. With investor sentiment gaining traction, and fundamentals favoring the purchase of gold, more investors are turning to the precious metal as an asset class.
At the same time, gold has become more accessible to those who are not as knowledgeable about the gold market. ETFs have opened up opportunities for inexperienced investors, allowing them to take advantage of the characteristics of gold without the hassle of making physical purchases. These ETFs also provide investors with easier diversification options, further increasing the appeal of gold.
It appears that seasonality and fundamentals are aligning to create a scenario where gold is a prime target for investors. Whether it is fear of economic downturns or just the sheer fundamentals, more and more investors are turning to gold and its increasingly accessible forms to diversify their portfolios and protect their wealth.