We are now entering into what is historically the best seasonal period of the year for the price of gold and mining stocks. It looks like the European Central Banks are largely done dumping their citizens' gold, which will only add to the very tight market conditions. India, historically the largest gold buying country in the world (China recently surpassed India) is entering into its biggest gold buying time of the year. It is in the autumn in which Indian farmers tend to invest their profits into gold. An even bigger component is the gold buying which occurs for Indian weddings, which tend to happen during the festivals in October and November. It is estimated that 40% of Indian gold demand occurs during the autumn.
Finally, in what can be seen as incredibly bullish for the price of gold, the Central Central Fund of Canada (CEF) just filed a prospectus filing for periodic share offerings up to $1 billion. CEF issues stock and then uses the proceeds to buy gold and silver bars, which CEF holds in trust. Unlike GLD, which refuses to show the world whether or not it really holds the gold it supposedly buys with shareholder money, CEF will accomodate any visitor who would like to view the CEF vault with their own eyes. CEF is seeing enormous demand for their shares from big funds, but typically only issues shares when the stock trades around 15% above the value of the underlying gold and silver in the trust. This filing is HUGELY bullish.
Keep an eye on the $960 and $980 price levels. If you wait until gold breaks over $1000, you might find yourself waiting for a pullback that never comes.