Gold seasonals are strong in August, oil seasonals weak
The first trading day of August hasn't produced much drama. I wrote yesterday about patterns in the month for a weak Australian dollar and soft British pound.
In oil, the August through December period is dismal.
The traditional thinking is that August is the true start of the Atlantic hurricane season and trouble in the Gulf of Mexico often means oil price surges but that's no longer true. The main reason is that on-shore wells in the US and Canada are now responsible for much of the marginal supply. Even if they weren't the overflowing stockpiles in the US could easily be tapped.
There's no rush to get into the trade because it extends for so long, but over the past 10 years, August has been the fourth weakest month for crude.
Gold, meanwhile, may benefit from seasonals. Since 2000, August is the second-best month after January. It's also the second-best over the past decade, with an average gain of 2.23%.
