Gold Trading Tips – The Gold Season
Here’s a gold trading tips to help you make money in gold trading. Gold is a commodity and therefore its price is subjected to seasonal change. However, due to the instability in the global economy, the impact of gold season is not as easy to gauge as it was a few years ago. So how can you capitalize on the gold season and what are the changes that will affect the gold prices?
In the developed world, the gold retail market activity is slowing down as the summer holidays are winding down. The next peak in gold retail activity will be towards the year’s end when festive season gets underway. There is good support for gold prices because jewelers will start to buy gold from manufacturers from early September as shipping, delivery and new designs take time.
India is still currently the world’s greatest consumer for gold. Its demand for jewelry, gold coins and gold bars accounts for 32% of the world’s gold production, followed by Greater China’s 20%. The typical harvest period in India is during month of August. With families get income from the harvest from the middle of August onwards, Indian investors turn to the gold market.
Indians like to deal in cash and they like to keep them in gold to avoid taxation. However, the Indians don’t buy gold in one gold but during auspicious times during September through May. The first peak for buying gold is in October during the Festival of Lights. Marriage season, where gold is bought as dowry to the groom runs though this period to May.
Besides seasonal factors, another factor that will affect gold price is central banks. Many central banks are controlling the supply of gold due to the decay in the value of their currencies. More central banks are also buying gold from the market. All these factors will provide high demand for gold.