22 December 2023
The concept of the ‘January effect’ in gold pricing, akin to the well-known stock market trend where prices rise early in the year, has been a topic of interest for investors. Gold tends to exhibit strong performance in January as well as late summer, with the January effect being statistically more significant. Since 1971, gold has averaged a 1.79% return in January, nearly triple its long-term monthly average, and has shown positive January returns about 60% of the time, increasing to nearly 70% since 2000. This trend may be attributed to factors like portfolio rebalancing, seasonal dips in real yields, and gold re-stocking in East Asia before the lunar New Year. However, it’s important to note that gold prices do not always rise in January…