Annual Price Patterns in Gold, Silver, Platinum
Tuesday, 6/18/2024 18:56
20 years' precious metal prices changes by month as H2 2024 begins...
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.
After surging to new all-time US Dollar highs in March, April and May this year, might the second half of 2024 repeat the more seasonally typical pattern? 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, British Pounds or Japanese Yen.
The second infographic then shows you the last 20 years' average monthly price change for gold in those 4 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 heaviest gold consumer nation, outpacing former No.1 India 15% by weight each year – 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 2004. Silver rose 13 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 repeatedly seen more new bullion investors than the following year's monthly average, and it was the very best month of the year for new account openings 3 times in the last decade.
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 2004 and 2023. 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.
Even so, note also that December is catching up. Over the last decade in fact, it now matches January's strike rate, with the gold price in Dollar terms rising 7 times. Maybe that reflects wholesalers buying in China, preparing for Lunar New Year demand by stockpiling metal sooner than later. Perhaps it also reflects short-term traders spotting the January bump and buying early, effectively betting on a repeat of the seasonal pattern.
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, early summer made a good time to buy gold, as well as silver or platinum, ahead of solid gains later in the year and then that repeated rise in January.
