Riding cycles with smart money
In commodities, history doesn’t just rhyme; it repeats with remarkable precision. Year after year, markets swing in familiar rhythms: oil climbs with the summer driving season, gold glitters ahead of Diwali, and copper wakes up after China’s New Year lull. For traders tuned in to these cycles, seasonality is more than background noise; it’s an edge.
What separates professionals from hopeful speculators, however, is not just spotting these patterns but aligning with the flows that truly drive markets: institutions, not retail noise. When seasonal biases meet institutional momentum, the odds tilt decisively in favour of those who are patient enough to wait for their moment.
The rhythm behind commodity prices
Ask any farmer or refinery operator, and they’ll tell you: commodities live by nature’s calendar. Weather, planting, harvesting, and cultural demand cycles create recurring peaks and troughs. Add human behaviour into the mix, traders who return to familiar trades each year, and you get a marketplace where predictability meets opportunity.
That predictability is self-fulfilling. If enough hedge funds expect crude oil to firm in June, their collective buying ensures it often does.
Patterns that keep paying
Look back a decade, and the evidence is hard to ignore:
Copper: Demand revives after the Chinese New Year as factories fire up again.
Silver: February rallies coincide with jewellery buying and speculative positioning.
Corn: Prices often sag from May to August on oversupply fears.
Crude Oil: June strength rides the U.S. summer driving season.
Coffee: October–November rallies reflect harvest cycles.
Gold: Prices shine in the weeks leading up to Diwali as demand spikes.
Heating Oil: Winter months consistently drive consumption higher.
These aren’t one-off flukes. They’ve repeated for more than a decade — and the charts prove it.
Trading with the tide
This means watching the Commitment of Traders (COT) report to see how hedge funds and asset managers are positioned.
If net longs are rising in an asset with a bullish seasonal bias, institutions are quietly accumulating. That’s the time to step in.
If net longs are falling during a bearish seasonal window, it’s usually a sign to get short.
This isn’t about reacting to headlines. It’s about anticipating moves before the crowd catches on — and exiting before the tide turns.
Reading the market’s mood
Charts and flows tell most of the story, but candlesticks often whisper the rest.
An engulfing candle at a support zone, a pin bar rejecting higher prices, or a
morning star at the bottom of a seasonal dip — these are clues that conviction
is shifting. Combined with seasonal bias and institutional confirmation, they’re
powerful timing tools.
Why it matters
Markets are noisy, crowded, and increasingly algorithm-driven. Seasonality
cuts through the clutter by anchoring trades to structural patterns, while
Institutional data helps confirm you’re not trading against the tide. The
takeaway? Commodity cycles aren’t folklore. They’re a repeatable roadmap.
Investors who respect them don’t chase headlines; they plan, position, and
Exit with precision.
Final word
Trading seasonality isn’t about guessing. It’s about listening to the market’s calendar and moving in sync with the biggest players in the room. For those willing to study the patterns, the payoff isn’t just in profits—it’s in clarity.
Temitope George Ijibadejo is an award-winning Forex fund manager with over 15 years of experience as a Forex fund manager and business consultant. He’s currently the African Regional Director for SquaredFinancials, a leading trading platform in Nigeria and Africa.
