The price of gold has been up by 1% or more in each of the last three months, and as we pointed out earlier, the commodity is trading more than two standard deviations above its 50-day moving average. Even though the commodity is overbought, however, doesn't necessarily mean that it's due for a big fall. The chart below shows the performance of gold so far this year (blue line) along with the commodity's average annual return going back five years (red line) and to 1980 (gray line). Below the chart we show the average and actual returns for gold on a monthly basis.
As shown in the chart, since 1980 gold has averaged a gain of 1.7% during the month of September, making it the best month of the year for the metal. Even over just the last five years, the price of gold has averaged a gain of 2.8% during September, which is enough to make it the third best month of the year. So while September has historically been a weak month for equities, gold has glittered.(click to enlarge)