How the Calendar May Help Gold Prices

LOS ANGELES, November 3, 2017 /PRNewswire/ --

Gold prices are up 12 percent this year, with futures markets trading around $1,300 an ounce on the New York Mercantile Exchange. Of course the price has softened slightly as summer ended.

However, prospects usually brighten in the fourth quarter.

Another rally in gold will certainly play to the gold miners including Barrick Gold Corporation (NYSE: ABX) (TSE: ABX), Randgold Resources (NASDAQ: GOLD), Corvus Gold (OTC: CORVF) (TSX: KOR), and Bullfrog Gold Corp. (OTC: BFGC).

According to the Commodity Trader's Almanac, gold prices tend to fall in late summer and then rise toward the end of the year as jewelers and consumers get ready for the holiday shopping season.

This gives gold watchers reason to pause and reload for the seasonal price swings.

Major mining companies stand to benefit from strong gold economics including Barrick Gold Corporation (NYSE: ABX) (TSE: ABX), Randgold Resources (NASDAQ: GOLD), and Corvus Gold (OTC: CORVF) (TSX: KOR), who have had significant gains this year.

At the same time junior mining companies including Bullfrog Gold Corp. (OTC: BFGC), are on track to advance from a rising gold market. Bullfrog Gold is developing a former Barrick operation in Nevada where positive news is emerging of a possible Carlin Trend.

Analysts don't seem phased by gold's decline from recent highs and say investors are likely to reload as gold moves.

IS GOLD AFFORDABLE? 

According to reports by Rediff Business, gold looks cheap compared to the stock markets that are highly overbought at the moment.

Their report shows gold prices have outperformed the markets -- S&P 500 -- thus far in this century, returning 86% more than the market if both asset classes were indexed at 100 levels starting December 31, 1999, in the latest World Gold Council's Gold Investor report for September 2017.

The S&P 500 has undergone two major contractions over the past 17 years. Gold, on the other hand, has held its value well. That is its appeal as a portfolio diversifier, the World Gold Council says.

At present, the gold-to-S&P 500 ratio is near 10-year lows. That means that gold is extremely undervalued, according to the WGC.

Within the wider group of gold opportunities, junior exploration and mining companies could be the least expensive compared to their potential for upside as gold's price rises.