What the heck do summer vacations have to do with the price of gold?

gold sands beach

If you have been following world economic news of late, you know there are lots of scary questions on the table right now.

 

Will Greece default on its debts?

What will happen if and when the U.S. hits its debt ceiling?

Will the Federal Reserve announce a QE3? (Otherwise known as printing hundreds of billions of crisp new dollars…money created out of thin air.)

Will the Chinese ramp up their gold buying spree? (Both the Chinese government and the Chinese people have been buying gold by the ton.)

These are all big questions, the answers to which could have a huge impact not only on the price of gold, but also on the value of the cash in our pockets.

Put simply, lurking in the shadows, there are plenty of reasons why the price of gold could go up substantially over the next few months.

However, it is summer up here in the Northern Hemisphere. And that, odd as it may sound, makes a difference.

How come?

For an extraordinarily mundane reason.

A lot of those fine folks on Wall Street are off on vacation, spending some of their multi-million dollar bonuses.

Investors and traders are on vacation. Individual buyers are on vacation. Not all of them, but enough of them to make a difference.

This impacts not only gold trading, but trading in equities as well. It’s the same every year. After the end of May things tend to slow down until the kids go back to school in September.

As a result, all other things being equal, the price of gold is likely to remain fairly flat over the next few months.

Of course, all other things are not equal. Some of those economic bombs mentioned earlier could go off and change everything.

But the slow down over the summer is an influence. So it is often a time to watch for some corrections, catch low prices, and then buy some more gold.

In fact, canny investors often sell in the spring to take some profits, and then wait for prices to fall during the summer to reinvest their money.

This is a reasonable bet during reasonable economic times. But of course, right now is not one of those times.

So keep your eyes peeled. Pray we don’t have a major crisis over the summer, and buy some gold if and when prices drop.

You can buy gold coins and gold bars online at GovMint.com.

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