Events surrounding our seasonal strategies are tumbling down this year. This time the Friday Gold Rush has us spellbound. Investui has had a very good start to the year so far. With 30% in the first three months one can certainly speak of an impressive result. A large part of this result has the Friday Gold Rush. Reason enough to take a closer look.
Gold back in demand as a safe haven
The collapse of Siliconvalley Bank and the drama of CreditSuisse… The collapses of both banks are certainly as different as day and night. However, both are causing investors great concern about a financial crisis, a “Lehman 2.0”. It should come as no surprise that investors are now buying gold to protect themselves. While gold was largely a disappointment last year as a hedge against inflation, a looming banking crisis seems to be giving gold a comeback as a crisis currency. Gold is currently in high demand as a safe haven. Gold prophets speak of long-term bright prospects of more than 2500 USD. The pessimists see the current course only as a short interlude before there is a downward slide. Everyone thinks they have arguments. The internet is full of “expert opinions”.
Source: WH SelfInvest NanoTrader
In any event, gold has gained more than 200 points since early March in a short space of time, picking up on highs not seen since April 2022.
Why does the Friday Gold Rush work?
The price of gold has experienced a dynamic rise. And now? Who are we following now? The bear hunters or the bull riders? In the following we will go into an interesting trading strategy that traders and investors use to strategically trade gold. Current prices or future forecasts are irrelevant. It is traded independently of the general market situation. It is the Friday Gold Rush strategy.
This strategy, used by portfolio manager André Stagge, among others, is characterized by its simplicity: buy gold every Thursday evening and hold your position 24 hours a day. The position will be sold on Friday evening. The strategy does not use a profit target but uses a fixed time stop.
And why is this working now? Gold serves two purposes. Gold is processed in the #jewellery industry. Companies in this industry do not store much raw material. They buy their raw gold on Friday for delivery on the weekend or Monday morning. Your production units have enough gold to work during the week, avoiding expensive weekend work. That’s where the “safe haven” comes in again. Gold serves as a “safe haven” for many investors. It’s “insurance” against a crash or other hard-to-calculate risks over the weekend. These investors also buy gold to hold over the weekend.
Both factors contribute to the fact that different parties tend to buy gold on Fridays. Buying gold on Friday is therefore statistically interesting.
Academic studies and reviews support this. Economists show in their studies that the gold price shows a clear effect on Friday. A quote: “Friday shows positive and significantly higher returns [für Gold],…”
All information about the Friday Gold Rush can be found here
The position is bought at the market price on Thursday evening. The position is sold at the market price on Friday evening.
Investui trusts the Friday Gold Rush.
From the first minute of service, Investui uses exactly this effect and the Friday Gold Rush strategy in its portfolio. In addition to S&P500, Dax, GBP/USD, Investui also trades this gold position in the short term. Investui relies on internal diversification, which must not be without gold as a raw material and metal.
If we lived in an idealized world, then we would imagine the course as it has been shown in the past three transactions of our real sample portfolio.
Such picture-perfect developments are not the norm and are not a promise of future results. However, the curves impressively reflect the effect within the current market phase.
Source: Investui – sample portfolios
How does Investui relate to the market with gold?
The comparison between using the Friday Gold Rush strategy and buying and holding gold is also interesting. The Friday Gold Rush strategy clearly outperforms the buy and hold strategy, especially in a weak gold market. Here is a historical comparison by André Stagge.
Investui has also made a comparison of the product and portfolio with gold. This chart compares Investui’s performance versus gold over the period 2015-2022. Investui performs many times better than the buy&hold result in gold.
Conclusion: The third of four Investui strategies is neither a jack of all trades nor a gold printing press. But do we agree that gold should be added to every portfolio? The Friday Gold Rush strategy has enriched the Investui portfolio in the past. Not always equally good, but often good to very good for a few years. That’s why we trade four strategies and not just one. Investui is a diversified portfolio with gold.
Risk Notice
This article is the personal opinion of the author. It is for information only. These analyzes must not be interpreted as investment or financial advice. An investment decision regarding any securities or other financial instruments requires background knowledge of your personal situation, which the author does not know. This content is out of date and will not be updated once published.
Every investment involves risk. Every investor should check, if possible with the help of an external advisor, whether these financial instruments are suitable for his personal situation. Profits made on a demo account are not a guarantee of future profits. Using leverage involves the risk of losing more than the total balance of the account. You are under no obligation to use leverage.
