Gold - Which Way Will It Go

Above is a weekly chart of GLD with its 30 week moving average. As you can see, the 30 week moving average has done a beautiful job at containing all of the pullback over the last 18 months. Every pullback to this moving average has been followed by a significant rally.

So here we are in the middle of August with the gold market bouncing once again off of this moving average. The question that still needs to be answered is whether or not the rally will continue. To help gain some insight as to what the gold market "should be" doing over the next few weeks we will turn to the seasonal charts.

Above is a seasonal chart (courtesy http://www.plexus.co.za/) which clearly shows that over the last 40 years, gold's most bullish month has been the month of September. What I like about the above chart is that 40 years of data is a significant amount of time to determine if there is a bias present in the market so it's pretty hard to ignore the upcoming month of September.

Whether or not gold rallies remains to be seen but given the strong uptrend combined with the seasonal strength during the month of September, I'd have to say that I am expecting gold to move higher in the weeks to come.