Annual Price Patterns in Gold, Silver, Platinum
Friday, 12/09/2022 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 (although perhaps overtaken in 2022 by India) – 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 14 times at New Year in US Dollar terms since 2002. Silver also rose 14 times and platinum has risen more repeatedly still, up 18 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 3 times.
Why this repeated surge of interest at New Year?
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, matched only by November's strike rate between 2002 and 2022. But November doesn't come close to January's average monthly gain, lagging the New Year's figure of 2.9% with an average 1.6% rise.
For British Pound investors, January with 13 gains has been beaten by August at 14, 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 14 times.
Past performance is no guarantee of future performance, of course. And 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.
Might 2023 see a repeat? If the underlying pattern remains true, then this coming New Year may be due a return.
Gold priced in both the US Dollar and the Japanese Yen rose in January 9 times running between 2012 and 2020. The precious metal also rose in 8 Januarys across that period for Euro and UK investors too.
2021 and 2022 then snapped that pattern, with gold prices falling in both of those Januarys against those 4 major currencies. But gold hasn't failed to rise in January for more than 2 years running for more than 2 decades in Dollar terms, and it has never fallen for more than 3 Januarys in a row since the bullion market was de-linked from the global monetary system with the late 1960s' collapse of the Bretton Woods Dollar-gold exchange system.
