Gold News

New Year Pop 2018 in Precious Metals?

Why do precious metals keep going up in January...?
 
PRECIOUS METAL prices have tended to rise in January over recent years, writes Adrian Ash at BullionVault.
 
Eleven times since 2003 in fact for gold and silver against the Dollar.
 
Platinum has been reliable still. It has risen in January 14 times in the last 15 years.
 
 
Such patterns are far from guaranteed to repeat again, of course.
 
But to drive precious metals all higher together in January like this so far this century, analysts might point to China and its huge lunar New Year gold demand...now the heaviest single consumer gold-buying festival, larger even than India's Diwali.
 
More likely, we think, it's because the financial world has tended to suffer a bad attack of New Year nerves.
 
These doubts and misgivings have grown more common, perhaps because the news-wires now demand more forecasts and shock headlines to mark the turn of the year. 
 
And like everyone else crossing off the last days on their calendar, investors look back...and see the good times receding. 
 
But when they turn to look ahead...? They see only problems, deadlines and threats. 
 
Back here in late 2017, we peer through the light snow falling on the Thames and see world stock markets trading at all-time record highs. One of the richest men in history just paid half-a-billion dollars for a painting. People are desperate to bet with leverage on bits of computer code already jumping 21-fold in price since this time 12 months ago. Interest rates remain near all-time record lows.
 
Maybe other investors will get jittery about such things as the New Year begins. Either way, this current drop in precious metal prices offers a chance to buy investment insurance at sharply reduced costs. 
 
BullionVault users are seizing this opportunity. Trading volumes have leapt 32% so far this month compared with November's average daily turnover. Net of client selling, customers have bought over 300 kilograms of gold already in December. 
 
That has taken their total holdings of vaulted gold bullion to a new record at 38.2 tonnes. 
 
Professional speculators, in contrast, are running the other way. Indeed, those hedge funds betting on silver futures and options just stampeded out of their bullish positions  at the fastest pace on record
 
What odds they change their mind just as fast once New Year 2018 begins?

Adrian Ash is director of research at BullionVault, the physical gold and silver market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and is now a regular contributor to many leading analysis sites including Forbes and a regular guest on BBC national and international radio and television news. Adrian's views on the gold market have been sought by the Financial Times and Economist magazine in London; CNBC, Bloomberg and TheStreet.com in New York; Germany's Der Stern; Italy's Il Sole 24 Ore, and many other respected finance publications.

See the full archive of Adrian Ash articles on GoldNews.

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