Those wondering if gold will ever catch a new wave can take solace that September has arrived — the month when history shows the precious metal performs best.
According to U.S. Global Investors, gold has returned 2.16 percent on average during September since 1969.
The only other month that comes relatively close is January, with a 1.53 percent average return, and the others are considerably less, with two months – March and October – actually showing negative historical returns, at -0.13 percent and -0.11 percent, respectively.
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In fact, there have only been five times in the last 20 years when September gold prices ended lower than they started (1996, 2000, 2006, 2011 and 2013).
Writing on the U.S. Global Investors blog, CEO Frank Holmes said there are multiple reasons for the precious metal's September luster.
"The most notable reason is what I call the Love Trade. In India, this month marks some of the most spirited gold buying in anticipation of Diwali, which falls on Oct. 23 this year. Following closely behind is the Indian wedding season, when gold is purchased for the bridal trousseau and as gifts in jewelry form," he explained.
"And September is normally when retailers restock their wares ahead of Christmas and after the Islamic month of Ramadan, at the end of which gold jewelry is commonly exchanged," Holmes added.
Another reason investors turn to gold in September is because is it historically also a bad month for the stock market, according to Holmes. "It's very possible that many investors turn to gold in September, knowing that the month's stock returns are typically poor."
Gold market experts are optimistic about Indian buying ahead of the all-important Indian holidays and wedding season,
Reuters reported.
However, India is second-biggest buyer of gold after China, where the story may be different. Chinese markets will be closed Monday for Mid-Autumn Festival, and Hong Kong will be closed the following day.
"We might not see robust buying even during the holidays because the anti-corruption campaign in China is hurting sales," one dealer told Reuters.
Beijing's anti-corruption campaign has toppled politicians and corporate leaders in various industries while also harming sales of luxury goods.
At Goldman Sachs, Jeffrey Currie, head of commodities research, is skeptical about gold and says he would short it at current levels. Currie predicted that gold would decline 17 percent from current levels by the end of 2014.
"Our target at the end of this year is $1,050, really driven by the view that we think that the Fed will ultimately be the dominant force here and put more downward pressure [on prices]. Gold is a hedge against a debasement in the U.S. dollar," he told
CNBC.
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