Does the demand for gold follow a seasonal pattern?
There are seasonal patterns to jewellery demand, although the pattern
varies from one country to another. Global demand is usually strongest
in the fourth quarter of the year, followed by first quarter demand.
The main elements governing this are:
- Western world: Christmas
- Islamic world: Eid Al Fitr at the end of Ramadan is a major
gold giving occasion. Since the Islamic year is ten or eleven
days shorter than the calendar year, the date of Ramadan moves
each year. In 2006 the Eid Al Fitr was on October 23rd. Eid
Al Adha (Feast of Sacrifice) takes place seventy days after
the Eid Al Fitr and is also a significant gold-giving occasion.
In 2006 Eid Al Adha fell on December 31st. Pilgrims going to
Mecca and Medina may also buy gold; the main pilgrimage period,
the Haj, culminates around the time of the Eid Al Adha.
- India: gold buying peaks during the wedding season and at
the times of various festivals that vary from region to another.
The biggest festival is Diwali, which usually falls in late
October or November. The wedding season varies from region
to region but is normally from November to May with a break
from approximately mid-December to mid-January. In August,
the two-week Shrad period is inauspicious for ceremonies associated
with gold buying; every three years or so this is followed
by an additional month (Adik Mas) which is also not a time
for gold buying. (Exact dates vary since the Hindu calendar
is a lunar one.)
- China and East Asia: Chinese New Year (last part of January
or first half of February).
- Turkey: Demand is highest in the third quarter due to tourist
purchases. The effect of a festival would normally show up
earlier than the date in gold sales since people purchase in
advance. Also, since data often represents retail or wholesale
purchases demand may often reflect distributors stocking up
for the season. The seasonal pattern does not affect price;
it is well known in the gold markets and therefore discounted.
There are many other factors in addition to demand which affect
the price of gold.
View
RSS
Help