Annual Price Patterns in Gold, Silver, Platinum
Sunday, 12/19/2021 11:01
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, the infographics below show you how gold prices have moved across the calendar year over the last two decades.
The first chart lets you count how many times, over the last 20 years, each month showed a gain for gold in either US Dollar terms, or Euros or British Pounds.
The second infographic then shows you the last 20 years' average monthly price change for gold in those 3 major currencies, too.
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 has risen 15 times at New Year in US Dollar terms since 2001. Silver rose 14 times and platinum has risen more repeatedly still, up 17 times in the last 20 Januarys.
So the New Year clearly invites strong investing into precious metals. Here at
BullionVault, in fact – the world's largest online investment service for physical precious metals – January has seen more new bullion investors than the following year's monthly average 7 times this decade, and it was the very best month of the year 5 times.
Why this surge of New Year interest?
Gold may benefit because investors use the start of January to review their portfolio and rebalance their holdings of bullion, equities and bonds.
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.
That would help explain why January is the best single month for gold gains over the last 20 years for US Dollar investors. August and November come close to its win-rate with 14 gains each between 2001 and 2021, but their average monthly gain also lags New Year, showing an average 2.0% and 1.3% monthly rise so far this century.
For British Pound investors, January with 14 gains has been matched by August, but like US investors, anyone buying gold with Euros has also seen the New Year stand out above all other months, showing a month-on-month gain 15 times.
Past performance is no guarantee of future performance, of course – not even such clear and consistent performance as precious metals show. What drives this New Year pop in bullion prices isn't 100% clear either.
But history says that, over the last 2 decades on average, December made a good time to buy gold, as well as silver or platinum, ahead of that repeated rise in January.
