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Gold ETFs Can’t Wait for October to End


Today is the last trading day of October and a turning of the calendar cannot arrive soon enough for gold bugs as the yellow metal’s gains for the month have almost been cut in half Thursday.

The SPDR Gold Shares (GLD) , the largest ETF backed by physical holdings of gold, entered Thursday’s session with an October gain of about 4%, though if markets closed right now, that gain would be pared to 2.5%. Still, that is no small feat when considering that since 1980, October is the worst year of the month to be long gold. [Fed-Fueled Gains Could be Short-Lived for Gold]

November brings an entirely different seasonal look for gold because, after September, the eleventh month of the year is the second-best in which to own bullion. Over the past 20 Novembers, gold has risen 55% of the time while producing an average gain of 1.9%, according to Equity Clock.

Thackray’s 2011 Investor’s Guide notes that from 1975 through 2011, November was the second-best month of the year in which to own gold. In November 2012, GLD and the iShares Gold Trust (IAU) were flat while the S&P 500 stumbled.

Apparently, some investors debt the efficacy of seasonal trends because as of Wednesday, a combine $1.64 billion had been pulled from GLD and IAU this month, extending a dismal year for both ETFs on the outflows front. Year-to-date, GLD and IAU are the worst and tenth-worst ETFs, respectively, in terms of outflows. [Gold ETF Outflows Accelerate in November]

As for silver, the iShares Silver Trust (SLV) is off nearly 4% Thursday, a performance that belies the white metal’s strong November track record.  Silver has risen in 55% of the past 20 Novembers with an average gain of 2.7%, according to Equity Clock.

That makes November the third-best month of the year for silver after February and January. In November 2012, SLV jumped 3.7%. [Silver ETFs Could Rally]

iShares Gold Trust

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of GLD and SLV.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.