Silver's Seasonal Secrets: How Post-Covid Trends Are Rewriting the Rulebook

Silver’s performance is remarkably seasonal over time, with certain months consistently outperforming while others nearly always underperform, but the last few years have disrupted several long-term trends, according to a new historical analysis of silver’s price action.

In a blog post published by InvestingHaven on Sept. 7, the author analyzes multiple historical silver seasonality charts in an effort to determine silver’s seasonal patterns, and whether longer-term trends are still valid today.

“Silver, like many other commodities, exhibits seasonal patterns that investors can use to inform their investment strategies,” they wrote. “By analyzing historical data, we can identify recurring trends that help predict silver market movements.”

The analysis covers long-term historical patterns as well as more recent trends from the past four years. “The comparison between these periods reveals shifts in market dynamics and potential opportunities for silver investors,” they said.

The first chart “highlights general seasonal trends in silver prices over a typical year.”

 

“These trends offer a foundational understanding of when silver tends to perform well and when it typically faces headwinds,” they said. “The chart shows a strong upward trend starting from January and peaking around March. This indicates that silver generally experiences positive momentum in the first quarter of the year.”

The next trend is mid-year weakness. “A sharp decline is observed around June, which marks a period of weakness for silver,” they wrote. “For investors, June might be a time to be cautious, either by holding off on new purchases or by taking profits on earlier positions.”

This is followed by a period of recovery and gains through Q3. “After the mid-year dip, silver prices tend to recover, with a notable upward trend from July to September,” the author noted. “This pattern suggests a second opportunity for gains in the market.”

The remainder of the year is characterized by sideways price action. “From October to December, prices show relative stability with smaller fluctuations,” they said. “This period could represent a consolidation phase where the market is absorbing previous gains or reacting to end-of-year economic data.”

According to this analysis, March and September are the likely price peaks, with June the likely low for the gray metal. “Investors should consider these seasonal movements when planning their entry and exit strategies,” they wrote.

The second chart explores the seasonal average for silver spot prices over a 30-year period, and “provides a historical baseline for understanding silver’s seasonality.”

 

The data shows a strong increase in silver prices from January through to a peak in March. “This aligns with the general seasonal trend observed in the first chart and suggests that the first quarter is a strong period for silver, possibly due to increased demand from industrial and investment sectors at the beginning of the year,” the author said.

The middle of the year shows prices correcting and stabilizing. “Following the March peak, prices tend to drop sharply through April to June,” they said. “After this correction phase, the prices stabilize around mid-year, likely as the market recalibrates from the earlier surge.”

Silver prices then appear to bounce around throughout the second half of the year. “From July to December, the chart shows a fluctuating pattern with no consistent upward or downward trend,” the author wrote. “This variability suggests that external factors, such as geopolitical events or macroeconomic data releases, could significantly influence silver prices during this period.”

The historical trend shows strong seasonal gains in the first quarter, with a peak in March before a mid-year dip, and no consistent pattern in the latter half. “This implies that investors should pay particular attention to the first quarter for potential buying opportunities, while the middle of the year might be better suited for caution or short strategies,” they said.

The third chart provides a more recent look at silver’s monthly performance from 2020 to 2024 in an attempt to identify whether recent market conditions have altered silver’s seasonal trends.

 

“April (80%), October (100%), and December (75%) are standout months with high probabilities of silver closing higher than it opened,” they noted. “This suggests that these months have been particularly favorable for silver investors in the last four years, possibly due to macroeconomic factors, market sentiment, or geopolitical events favoring safe-haven assets like silver.”

By contrast, February, June, and September consistently show lower gains. “This indicates that these months may be periods of consolidation or correction, where silver faces more headwinds or reduced demand,” they wrote.

“The recent 4-year period suggests a shift toward stronger performance in the later months of Q4, especially in October and December, compared to historical trends,” the author said. “This shift could be due to recent global economic dynamics, including the COVID-19 pandemic’s impact on market behavior and investor sentiment toward precious metals.”

The fourth and final chart expands the analysis to a longer-term period from 2005 to 2024, and “allows us to see if the observed recent trends align with or deviate from longer-term patterns.”

 

“January (65%) and October (68%) remain strong months in the long-term analysis, indicating a degree of consistency in positive performance,” the author noted. “These months may reflect regular cycles in industrial demand or investor repositioning at the start and end of the year.”

Months such as February, May, and July showed mixed results and lower probabilities of positive returns. 

“This variability could be influenced by a range of factors, including economic data releases, currency fluctuations, and geopolitical events that affect silver’s role as both an industrial metal and a safe-haven asset,” they said. “The extended period analysis reinforces some seasonality trends but also shows variability across months that are not as evident in shorter periods. This suggests that while some seasonal trends are reliable, others are more susceptible to change based on broader economic conditions.”

The author then compares the recent 2020-2024 period against the previous ones to identify possible shifts in silver’s seasonal trends.

Their first observation is that silver’s performance tends to pivot in key months. “Both the 2005-2024 and 2020-2024 periods show October as a strong month, but January has shown a decline in its seasonality strength in recent years,” they said. “This could be due to changing economic conditions, such as shifts in monetary policy, inflation expectations, or industrial demand patterns.”

The precious metal’s performance in April and December has also improved of late. “There is a marked improvement in these months in the recent period (April: 80%, December: 75%), compared to more mixed performances in the longer term,” The author noted. “This indicates that external factors in the past few years, such as economic stimulus measures, have favored silver prices during these months.”

The second observation is that silver’s weakest performances also consistently occur during specific months. “Both periods consistently show June and September as weak months for silver,” they said. “This trend suggests these months are traditionally bearish or face stronger headwinds, such as market corrections or reduced demand. This consistency allows investors to maintain similar strategies over time regarding these months.”

The third broad conclusion is that the longer-term data was more stable in its patterns than the more recent sample. “The longer-term data (2005-2024) shows more stable fluctuations mid-year compared to the recent period (2020-2024), which has shown more volatility in some months,” they wrote. “This could reflect recent global market uncertainties, such as supply chain disruptions, changes in economic policies, and varying investor sentiment.”

In conclusion, the author said that the trend analysis suggests that “investors need to remain adaptable, combining insights from long-term historical data with recent trends to make informed decisions.”

“For investors, this means that while it is essential to consider historical silver seasonality trends, one must also stay attuned to recent silver market dynamics that could alter these patterns,” they said. “Silver’s performance can be influenced by a myriad of factors—from global economic conditions and monetary policy changes to geopolitical tensions and shifts in industrial demand. Therefore, a balanced approach that combines historical insights with current market analysis is likely the best strategy for understanding the silver market.”

This article originally appeared on Kitco News.