September is Historically the Best Month for Gold

Business Insider reported today that since 1969, gold has seen gains of 2.16% on average during the month of September, making it the best month of the year to buy or own gold.

There are a few reasons why gold prices go up at the end of summer nearly every year. One is that gold demand in India typically rises prior to festivals honoring Ganesha and for Diwali (the Hindu festival of lights). Additionally, India has a "wedding season" that coincides with autumn and gold is traditionally purchased for the bridal trousseau and given as gifts in the form of jewelry. Another reason that gold demand (and prices) increase during September is the end of the Islamic month of Ramadan, where gold is also traditionally given as gifts. 

But what has an even greater impact than this increase of physical gold demand is that historically, September has been the worst month of the year to buy stocks. Of course, this causes investors to cut back on stock purchases and hedge the losses to their portfolios with gold. 

Frank Holmes, the Chief Investment Officer for U.S. Global Investors said, "[September] has been the worst-performing month since 1950 for all of the major indexes and exchanges, including the Dow, S&P 500 Index, NASDAQ and Russell 1000 Index."

Over the past 20 years, gold has seen gains every September except for 5. In the years 1996, 2000, 2006, 2011, and 2013 gold closed below what it opened for the month.