When Is the Best Time of Year to Buy Gold? Seasonality of Demand
Demand for investment gold is not spread evenly over the year – in some periods it rises worldwide because of cultural and religious festivals, at other times it falls to an annual low. In this article we look at what drives the seasonality of demand and what it means for buying gold or silver.
The Indian wedding season – the biggest driver of demand
India has two wedding seasons – the main one from October to December (after the monsoon) and a smaller one from April to June. Gold is an integral part of Indian weddings: the bride’s family traditionally gives gold jewellery of considerable value. Weddings are estimated to account for around half of India’s total annual demand for gold jewellery.
Akshaya Tritiya and Dhanteras: Indian festivals linked to gold
Akshaya Tritiya is one of the most important days in the Hindu calendar for buying gold – according to tradition, gold bought on this day brings lasting prosperity. Analyses show that demand around Akshaya Tritiya rises above the usual monthly average very consistently year after year.
Dhanteras (part of the Diwali festival) has a similar, if smaller, effect – in the weeks before it, Indian gold demand rises noticeably compared with an ordinary month.
Chinese New Year
Gold also plays a traditional role in Chinese (lunar) New Year celebrations – gold jewellery and coins are given as a symbol of prosperity for the new year. Demand in China and in countries with a Chinese diaspora therefore rises seasonally at this time.
When demand is at its lowest
According to available analyses of the Indian market, the period of lowest seasonal demand is usually summer – July to September, the monsoon season before the autumn wedding and festival season. Jewellers do not need to build up stock during this time, which can also show in lower trading premiums on physical gold.
What it means for buying at GOLDU
The seasonality described mainly concerns Asian markets (India, China) and their influence on global physical demand and on trading premiums for some products. The spot price itself, however, is set by the global market and influenced by many more factors than seasonal demand – more in the article How the gold spot price is set.
At GOLDU, prices are updated continuously according to market developments – how exactly is described in the article Why GOLDU prices change every three minutes. If you prefer regular smaller purchases regardless of seasonal swings, the approach in the article Buying gold regularly may suit you.
Frequently asked questions
Does seasonal demand also apply to the gold price at GOLDU?
Seasonal demand from Asia mainly affects the global physical market and trading premiums; the spot price, however, is formed globally and follows many other factors. It is not a mechanism that can reliably predict short-term price moves.
Is Akshaya Tritiya a buying signal outside India too?
It is primarily a cultural and religious festival that influences the Indian jewellery market. For investors outside India it is of informational rather than practical value.
Does lower summer demand automatically mean a lower price?
Not necessarily – lower seasonal demand may be associated with lower trading premiums on physical goods, but the spot price itself is determined by quite different, more global factors (interest rates, geopolitics, central bank demand and others).
Related articles
About the author
Adolf Baumann, analyst at Baumann Group a.s. (GOLDU), has been working with precious metals for over 30 years. He has seen euphoria, crashes and panic on the markets – and he still enjoys it. He explains in plain language what moves the price of gold and silver and how to handle them without unnecessary mistakes. His weakness? He refuses to wear a suit.
