SELL IN MAY AND GO AWAY

The monthly chart of continous gold futures shows a clear seasonal tendency for gold to sell off or consolidate from May into late summer or early fall. http://screencast.com/t/ur0AdxlCr2C4 Count over four bars from the first bar of the year.

In the past 12 years only 2004 and 2005 missed that pattern as gold had already peaked early in both years. The traditional explanation for the seasonal was that June graduations and weddings in the west and pre-monsoon festivals in the east (south Asia) were mostly over, so less jewelry fabrication was needed until starting for year end holidays after summer.

Despite the fact that gold is now bought as much as a financial asset as it is for jewelry, that seasonal tendency has persisted. Or perhaps as an investment asset gold has just melded into the general tendency of stock markets to sell off from May or June. http://screencast.com/t/F8fvatJFj3r

In any case I have been, am now, and will be lightening up on bond duration, on stocks, and on metals and energy exposure, and I am going away in May. Total gains year to date including all cash balances are 6.67% which annualizes to 21.67%. Of course by reducing volatile assets at this time I am reducing my chances to get to 21.67% gains for the whole year, but also my chances of surviving with gains of some type are better no matter what happens. 

The beauty of internet communications worldwide and the convenience of ETFs mean that one can go away but still stay in touch and easily make changes if necessary.