The gold miners’ stocks have certainly had a wild ride this year. After initially skyrocketing out of deep secular lows into a mighty new bull market, they recently suffered a massive correction climaxing in an extreme plummet. This coincided with gold stocks’ major seasonal low in October. That heralds their strongest seasonal rally of the year heading into and through winter, a very bullish omen for coming months.

Gold-stock performance is highly seasonal, which certainly sounds odd. The gold miners produce and sell their metal at relatively-constant rates year-round, so the temporal journey through calendar months should be irrelevant. Based on these miners’ revenues, there’s no reason investors should favor them more at certain times of the year than others.Yet history proves that’s exactly what happens in this sector.

Seasonality is the tendency for prices to exhibit recurring patterns at certain times during the calendar year. While seasonality doesn’t drive price action, it quantifies annually-repeating behavior driven by sentiment, technicals, and fundamentals. We humans are creatures of habit and herd, which naturally colors our trading decisions.The calendar year’s passage affects the timing and intensity of buying and selling.

Gold stocks exhibit strong seasonality because their price action mirrors that of their dominant primary driver, gold. Gold’s seasonality isn’t driven by supply fluctuations like grown commodities experience, as its mined supply remains pretty steady all year long.Instead gold’s major seasonality is demand-driven, with global investment demand varying dramatically depending on the time within the calendar year.

This gold seasonality is fueled by well-known income-cycle and cultural drivers of outsized gold demand from around the world. And the biggest seasonal surge of all is just now getting underway heading into winter. As the Indian-wedding-season gold-jewelry buying that fuels this metal’s big autumn rally winds down, the Western holiday season is ramping up. The holiday spirit puts everyone in the mood to spend money.

Men splurge on vast amounts of gold jewelry for Christmas gifts for their wives, girlfriends, daughters, and mothers. The holidays are also a big engagement season, with Christmas Eve and New Year’s Eve being two of the biggest proposal nights of the year. Between a quarter and a third of the entire annual sales of jewelry stores come in November and December! And jewelry historically dominates overall gold demand.

According to the World Gold Council, jewelry accounted for 58% of total global gold demand in 2014 and 57% in 2015. That works out to about 4/7ths of annual gold demand. The first half of 2016 proved a historic exception, as gold investment demand trumped jewelry demand for two consecutive quarters for the first time ever. Nevertheless jewelry demand still ran 40% even in H1’16’s young investment-driven gold bull.

This outsized Western jewelry buying heading into winter shifts to pure investment demand after year-end. That’s when Western investors figure out how much surplus income they earned during the prior year after bonuses and taxes. Some of this is plowed into gold in January, driving it higher. Finally the big winter gold rally climaxes in late February on major Chinese New Year gold buying flaring up over there.

So during its bull-market years, gold has always tended to enjoy major winter rallies driven by these sequential episodes of outsized demand.Naturally the gold stocks follow gold higher, amplifying its gains due to their great profits leverage to the gold price. Today gold stocks are once again just heading into their strongest seasonal rally of the year driven by this robust winter gold demand.That’s super-bullish.

Since it’s gold’s own demand-driven seasonality that fuels the gold stocks’ seasonality, that’s logically the best place to start to understand what’s likely coming. Price action is very different between bull and bear years, and gold is absolutely in a new bull market. Between the 6.1-year secular low it suffered in mid-December and early July, gold powered 29.9% higher easily exceeding that +20% new-bull threshold.

Gold’s last mighty bull market ran from April 2001 to August 2011, where it soared 638.2% higher! And while gold consolidated high in 2012, that was technically a bull year too since gold just slid 18.8% at worst from its bull-market peak. Gold didn’t enter formal bear-market territory at -20% until April 2013, thanks to the crazy stock-market levitation driven by extreme distortions from the Fed’s QE3 bond monetizations.

So the modern bull-year seasonality relevant to this new bull year of 2016 ran from 2001 to 2012, before the Fed-induced bear-market years between 2013 to 2015. This first chart distills down gold’s bull-year seasonal tendencies by averaging gold prices indexed within each calendar year. This methodology is essential because it renders price percentage moves perfectly comparable despite differing prevailing gold prices.