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Gold  ( Original )
OCT 31, 2012


Today’s AM fix was USD 1,723.25, EUR 1,330.59, and GBP 1,065.64 per ounce. 
Yesterday’s AM fix was USD 1,718.00, EUR 1,321.54, and GBP 1,065.89 per ounce.

Silver is trading at $32.60/oz, €25.25/oz and £20.26/oz. Platinum is trading at $1,576.50/oz, palladium at $612.80/oz and rhodium at $1,100/oz.

Gold climbed $11.70 or 0.68% yesterday and closed at $1,721.20. Silver surged to hit a high of $32.411 and subsequently gave up some of its gains but still finished with a gain of 1.51%.

The yellow metal remained steady as China’s PMI grew to 50.2 from 49.8. This was the first increase seen in three months and a reading greater than 50 signals expansion.

Gold broke above recent resistance at $1,720/oz yesterday ahead of the key nonfarm payrolls report tomorrow and the US Presidential election next week. 

Gold dropped 2.8% during October, its first one-month decline since May but remains 10.2% higher so far in 2012. 

Stock markets internationally struggled in October. The Dow finished the month with a 2.5% loss, with the S&P 500 off 2% and the NASDAQ down 4.5%. Tech darling stock Apple fell 10% in the month.

For the year, however, the Dow is still up 7.2%, with the S&P 500 up 12.3% and the NASDAQ up 14.3%.

The nearly 3% drop for gold represents another buying opportunity, possibly the last optimal intermediate buying opportunity for many months. 

While October is one of the weakest months for gold, November on the other hand is the strongest month. 

The data shows (see ‘Gold Seasonality Table’ and ‘Gold Seasonal 30 Years Chart’) how gold’s strongest month for returns in the last 5, 10 years and 30 years is November – and by a significant degree.

Gold Seasonality Table -  November Returns - 5 and 10 Year Average Gains Of 5.6% and 5%

As per the ‘Gold Seasonality Table’ from Bloomberg , the 5 year average (2007-2011) saw returns of 5.6% and the 10 year average (2002-2011) saw returns of 5.1%

Gold’s outperformance in November is significant. The 10 year average data shows that September was the next strongest month with a 2.6% average return. Then came August at 2.3% and January at 2.2%.

The 5 year average data shows that February was the next strongest month with a 3.7% average return.  Then came September at 3% and January at 2.2% (see chart above).

Gold Spot $/oz, May 2008-Nov. 2010 – (Bloomberg)

Interestingly, November’s maximum gain over the 5 and 10 year period was the 12.9% gain seen in November 2008 – the month President Obama was elected.

History never repeats but it often rhymes and we expect gold to again outperform in November.

Cross Currency Table – (Bloomberg)

(Bloomberg) -- Turkey Exchange Says Gold Imports Were 3.7 Tons Last Month
Silver imports were 20.2t in October, Istanbul Gold Exchange says on its website.

(Bloomberg) -- Gold coin sales estimated at 59,000 oz vs 68,500 oz, data from the U.S. Mint website show.  Silver coin sales fall to 3.153m oz from 3.255m.

(Bloomberg) --  Mexico’s August Silver Production Totaled 344,804 Kilograms
Mexico’s August silver production was 344,804 kilograms, the National Statistics Agency said today on its website.

(Bloomberg) -- SPDR Gold Trust Holdings Unchanged at 1,336.3 Tons by Yesterday
Gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged at 1,336.3 metric tons as of Oct. 31, according to figures on the company’s website.

The data was updated for the first time since Oct. 26 because the stock market was closed for two days for Hurricane Sandy and there was no information on holdings.

Gold futures extend gains in Asia – Market Watch

Gold steady as investors await U.S. data, election - Reuters

Gold flat ahead of China PMI data - Reuters

Gold Set to Drop as China Manufacturing Boosts Economic Outlook - Bloomberg

Gold price to rally regardless of who is elected President   – The Telegraph

Some Incredible Gold Charts – 24H Gold

Gold Confiscation At $3,000 Is Complete Nonsense Says ‘Mr. Gold’ - GoldSeek

Is Silver The New Gold? – The Perth Mint