Think about buying some gold. The metal is one of the few asset classes in well-defined uptrend these days (see previous entry on zeitgeist). In the short term, since hitting $373 in April, gold has moved back down to $340, then back up to $360 where it lies now.

Looking back at a five year chart from 1999, note that one of the best ways to play the metal has been to buy it in July while gold traders have been busy carving out a trough. Through August, September, and in one case as long as the following January, gold has moved smartly upwards. Note the chart below which shows the success of this strategy in 1999, 2001, and 2002. Now that a new July has arrived, we seem to be at one of those points, with gold forging a trough at the $340-350 level.

Purchasing now would give the investor exposure to the sweet spot in September, historically gold's strongest month. Note the seasonal chart of gold below, which gives an average idea of how gold trades throughout the year. Over the last 15 and 25 year periods, September has always been the strongest month for the metal.

Gold equities, stocks like Barrick, Newmont, and Goldcorp, led gold out of its five year slump in 2001. The Amex Gold Bugs index, the HUI, bottomed and started to rise several months before gold started to show any signs of life, almost as if equity traders were anticipating commodity movements. The HUI hit new 6 year highs today while the metal still hovers far below previous highs. Check out the chart below and note the breakout. Could equity traders again be anticipating a big move in gold?