Annual Price Patterns in Gold, Silver, Platinum

Last 20 years' precious metal prices changes by month...

 

PRECIOUS METALS analysts often speak about a seasonal shape in the gold market.

 

That's because, over recent decades, gold prices have sometimes seen a rise in the New Year and spring, followed by a summer drop or lull, and then a further rise into year-end.

 

Some analysts link that pattern to seasonal changes in global demand for gold. They see those price changes leading what happens to silver and platinum prices between January and December, too. 

 

Whether or not that analysis is correct, this infographic shows you how gold prices have moved across the calendar year over the last two decades.

 

You can choose to see how prices changed since the year 2000 in either US Dollar terms, or Euros or British Pounds. You can compare the best and worst months since the Millennium for silver prices and platinum as well.

 

The chart also lets you count how many times, over the last 20 years, each month showed a gain for gold, silver and platinum prices.

 

Whatever pattern you might or might not see in the chart, consumer gold demand does have a clear seasonal pattern.

 

Demand in China – now the world's No.1 gold consumer nation – peaks with Chinese New Year. That's followed by Valentine's Day, and then the festive season of Akshaya Tritiya in southern India.

 

The summer brings a lack of festivals or weddings on India's Hindu calendars, before household demand in the No.2 consumer nation jumps in the run-up to Diwali. Followed by Christmas – the peak gifting season across Europe and the Americas – that then runs into retailer stockpiling for the Chinese New Year again.

 

Consumer demand is not the only factor which can affect gold prices however. Rising assets tend to require inflows of investor cash, both driving and chasing prices higher.

 

With that in mind, check out January's track record for rising precious metal prices. Because, as our interactive chart shows, gold and silver have both risen 14 times at New Year in US Dollar terms. Platinum has risen more repeatedly still, up 17 times in the last 20 Januarys.

 

January may also bring heavy demand to invest in gold because – looking at the 12 months ahead – wealth managers and private savers alike focus on potential risks to their money. So they choose to buy a little investment insurance for protection.

 

January, however, isn't the best single month for gold gains over the last 20 years. For US Dollar investors, November matches its win-rate of 14, and August beats it, showing a rise 16 times so far this century. For British Pound investors, January (with 13 gains) has been beaten by February (14) and also August and September (each with 15).

 

Silver and most especially platinum, in contrast, have seen stand-out rises in January, both by number and also by size. The first month of the year averaged 4.1% gains for silver prices and 5.8% for platinum in US Dollar terms. For UK investors, platinum rose a staggering 19 times in the last 20 Januarys. 

 

Why might New Year see such strong rises in these 2 precious metals? Both silver and platinum find most of their demand today from industrial use. Some auto-makers, chemical plants, pharmaceutical companies and others manufacturers book their supplies for the coming year in January.

 

Chinese New Year then comes at the end of that month or early in February. It brings a spike in jewellery demand from platinum's No.1 consumer market. Platinum has also tended to retreat in the month of December – making a New Year pop more likely – falling 6 times in the last 10 years. Platinum's end-year price has, across the last 2 decades, then been cheaper than all of the following 12 months a total of 8 times. And in each of the nine New Years since the year 2000 when platinum fell in December, January's gain more than reversed it.

 

Past performance is no guarantee of future performance, of course – not even such clear and consistent performance as precious metals led by platinum show. What drives this New Year pop in bullion prices isn't clear either.

 

But history says that, over the last 2 decades on average, December made a good time to buy gold, silver or platinum, ahead of that repeated rise in January.