Misbehaving Metals
In past issues of Seasonal Insights I have discussed the very odd behavior of a variety of instruments in the course of the typical week: in issue 17 the topic were intra-week moves in S&P 500 Index, and in issue 18 the no less interesting intra-week pattern in Bitcoin.
In issue 22 I moved on to the “Strange Behavior of Gold Investors from Monday to Thursday”, which was followed by an examination of the associated pattern in silver a week later.
The metals back when they were young. Their behavioral issues became evident at an early age already, and the passage of time has done nothing to alleviate them. Our pal palladium is a particularly obnoxious specimen, known for spending his Fridays sneaking up on and murdering unsuspecting and by now nearly extinct bears in cold blood with disconcerting regularity and great verve. [PT]
Several readers asked me whether a similar pattern could be observed in platinum and palladium as well. Is the action in these metals on Friday standing out, as it does in gold and silver?
Let us take a closer look.
Friday Stands Out in Platinum
Below I examine the average performance of platinum on individual days of the week. The chart shows the annualized performance of platinum since 2000 in black, and that on individual days of the week in blue.
I once again measured returns from closing price to closing price on the COMEX; thus the performance of Tuesday represents the average annualized difference between the close on Monday and the close on Tuesday.
Platinum, performance by days of the week, 2000 – 2017. In Platinum the average performance on Fridays glitters even more than that of gold.
Just as is the case with gold, Friday is the strongest day for platinum as well. Its special status is even more pronounced: on average, platinum gained 5.68 percent annualized on Fridays, while its average weekly gain amounted to just 4.72 percent.
Investors who invested exclusively on Fridays, were therefore able to book a larger profit than they would have made by holding a platinum position on every day of the week! By contrast, the average performance on Tuesdays was particularly weak, generating an average annualized loss of – 2.95%.
As an aside, the relatively close correlation between precious metals on individual days of the week is quite different from their annual seasonality. As you can easily ascertain on www.seasonalcharts.com or with the help of the Seaonax app on Bloomberg or Reuters, the annual seasonal patterns in gold differ significantly from those of the other precious metals.
The Days of the Week Under the Magnifying Glass
How precisely did these patterns behave over time? The next chart shows the return of platinum since the turn of the millennium in gray and a breakdown of the cumulative return on individual days of the week in different colors; all are indexed to 100.
Platinum, cumulative performance by days of the week, 2000 – 2017. Friday beats every …read more
Source:: Acting Man
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