Gold Up And Stock Market Down
The Sun always come in transit in Virgo and Libra during the months of September to October every year. This will lead to a positive trend for gold and weakness for the world stock market. As per Astro economics, gold prices always witness a rise during September. And, I believe that this year also the same trend will continue. According to researchers, gold has shown gains in the past 16 out of 20 Septembers.
Since 1988, this global benchmark for gold prices gained an average 3.4% from the end of August to the end of September. It rose more than 5% in September in the past seven out of 20 years.
Gold’s recent tendency to do well in September contrasts with what happens in equity markets. September, historically, has been bad for stocks.
September has been the best time for gold in terms of its month-over-month price appreciation. The reason may be that stock markets are down in September. And, when stock markets are down, investors look towards gold for safe investment. In the second week of September 2009 a few important changes will take place in transit. Saturn is going to change its position from Leo to Virgo and Mercury will turn retrograde within the same period. In financial astrology this is considered to be a strong signal for change in stock and commodity market trends. World stock market may come under selling pressure while precious metal like gold may move toward north. Also, US dollars may also come under pressure against Euro in the month of September 09. This may be the reason for bullion prices jumping up in September.
Gold rose 6.2% in September last year. But it lost in September of 2006, 1996, 1993, and 1988. Gold tends to do well in September because it’s the run-up to several events that can drive up gold consumption. Jewellery maker’s start to stock gold ahead of Diwali, one of India’s most important religious festival. September also kicks off the post-monsoon wedding season in India, the world’s biggest gold consumer. Jewellery makers also stock gold in September ahead of the holy month of Ramzan in Muslim countries such as the United Arab Emirates. The end of Ramzan is the Eid ul-Fitr holiday. The demand for Gold in China, the world’s second largest consumer, also tends to rise in the months following the October 1 national day to the Chinese New Year in January or February.
Although gold has performed well in the past 20 Septembers, its earlier performance wasn’t as good. In the 16 years after the US de-pegged the dollar from gold in 1971, gold ended lower for eight of those Septembers. The upcoming Diwali festival and wedding season should help to underpin a seasonal improvement over the remainder of 2009.