by Adam Hamilton
The gold miners’ stocks have rocketed higher this summer, smashing out of their usual summer-doldrums sideways grind. That atypical strength has been driven by gold steadily marching to major new secular highs, fueled by strong investment demand. This has carried gold stocks and the metal they mine back to their traditional strong season, which begins with robust autumn rallies usually accelerating in late summers.
Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year. While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals. We humans are creatures of habit and herd, which naturally colors our trading decisions. The calendar year’s passage affects the timing and intensity of buying and selling.