In January 2020, the price of gold in the euro equivalent grew by 6%, once again confirming the fact that January was the most profitable month for gold investors. However, past years' figures show that February is far less lucrative.
Gold yielded a good euro-based profit this January, due to an array of seasonal factors. Investors earned +5.92%, which translates into the best January result since 2015. By the end of the month, the price hit an all-time high of 1,431 euro. The question on all investors' minds is simple - what will happen to the price in February 2020?
At the end of January 2019, an ounce of gold was worth only 1,150 euro, and now it's trading for 1,431 euro – a year on year growth of 24%. By contrast, from a historical standpoint, February yields just +1.06% on average, with the records going back to 1970. February is the 5th most profitable month after August (+1.07%). Out of the past 50 years, there were only 28 years (or 56% of cases) when the price of gold grew in February. In the past 4 years, however, the result in February was always positive.
It is particularly worth looking back at 2016 and 2017, when gold prices grew rapidly in February. January 2016 is also an interesting case study, granted that it was the most lucrative January since 1974. This was due to a slowdown in the Chinese stock market and a sharp decline in oil prices. Those events led the media to proclaim an inevitable financial market crash.
Top 5 years by gold profitability in February:
1973: +15.18%
1974: +21.73%
1979: +7.07%
1997: +7.92%
2016: +10.53%
Worst 5 years by gold profitability in February:
1983: -16.52%
1986: -11.20%
1988: -7.95%
1989: -3.92%
2003: -5.59%
Judging from the current circumstances, we can presume that this February, gold will once again demonstrate good growth. The January price rally is likely to continue thanks to the ongoing market instability. This uncertainty will help maintain investors' interest in hedging assets, including gold.
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