Gold vs US dollar seasonality trends: what could be the best and worst months for traders?
Gold and the US dollar often move through familiar seasonal patterns shaped by macroeconomic cycles, fiscal factors and investor behaviour. These rhythms have tended to repeat over time, offering insight into how markets respond to broader global conditions.
Past performance is not a reliable indicator of future results.
Gold and the US dollar have long shown recurring patterns of performance across the calendar year. Historical data indicates that both tend to start the year strongly – gold has averaged a 1.6% rise in January, while the US dollar index (DXY) has typically gained around 1% during the same month.
Much like seasonal changes in agriculture or retail activity, both assets display recurring behavioural patterns, shaped by macroeconomic cycles, policy shifts and investor sentiment. While their movements are often inversely correlated, both have experienced periods of simultaneous early-year strength for different reasons.
This article explores how these patterns have evolved up to late 2025, with updated performance data, macroeconomic context and technical insights for those monitoring gold and the US dollar markets.
Past performance is not a reliable indicator of future results.
Gold’s seasonal trends
Historically, gold’s strongest months have been January and December, with long-term average returns of +1.6% and +1.5% respectively. These trends have continued into 2025, when the metal approached record highs near $4,000/oz, after peaking at $4,179/oz in October.
While past performance is not a reliable indicator of future results, gold’s resilience this year reinforces its historical seasonality. The metal rose notably in the second half of the year, supported by strong central bank buying (estimated at around 900 tonnes in 2025) and a 5% year-to-date decline in the US dollar.
Cultural demand has also remained consistent. India’s wedding season, which runs from October through March, continues to drive gold purchases for jewellery and ceremonial use. According to the World Gold Council, India remains the world’s second-largest gold consumer, with annual demand of around 850 tonnes, accounting for roughly a quarter of global jewellery consumption.
Seasonal demand between December and April has often coincided with increased buying from both retail investors and central banks, forming gold’s statistically strongest window of the year.
Recent developments: volatility and new correlations
In 2025, gold’s movement has been shaped not only by safe-haven demand, but also by evolving macroeconomic conditions. Global monetary easing, geopolitical uncertainty and record central bank accumulation have supported its position as a diversification asset.
However, volatility has increased. A 4.26% decline in November marked a short-term correction from October highs, with support emerging around $3,970/oz, a level closely monitored by analysts heading into early 2026 – historically one of gold’s stronger periods.
Notably, gold’s correlation with interest rates and the dollar has shown signs of divergence. Even as major central banks reduced policy rates, gold continued to strengthen, signalling a partial decoupling from its traditional inverse relationship with yields.
Past performance is not a reliable indicator of future results.
The US dollar’s seasonal trends
The US dollar’s seasonality remains broadly consistent with historical patterns. Over the past five decades, the DXY has typically gained about 1% in January, recording positive monthly returns around 65% of the time, while December has historically been weaker (-0.9%), with only 36% of years ending positive.
This pattern persisted in 2025, as the dollar softened towards year-end amid corporate tax flows and portfolio rebalancing, before recovering in early January as capital was repatriated.
The cyclical weakening in December often reflects corporate balance sheet adjustments, with firms reallocating cash abroad for tax purposes. Repatriation flows in January then typically lend short-term support to the dollar.
For traders, these shifts illustrate how fiscal timing and liquidity cycles can influence currency movements, even in the absence of major policy actions.
Past performance is not a reliable indicator of future results.
Evolving macro context in 2025
The 2025 trading environment has been characterised by a softer dollar, broad monetary easing and heightened geopolitical uncertainty. These factors collectively supported record inflows into gold ETFs and physical holdings.
The 'Santa Rally' effect, usually associated with equities, appears to have extended to commodities. Data from late 2025 suggests that seasonal inflows into gold began in late November, preceding the traditional year-end uptick. This highlights the increasing role of institutional portfolio rebalancing in shaping short-term commodity flows.
Gold’s strongest seasonal period now generally spans mid-December to mid-April, with additional momentum often observed between August and October. Historically softer periods, such as May to July, have continued to show reduced momentum, while October remains one of the more volatile months for gold prices.
Past performance is not a reliable indicator of future results.
Technical and strategy considerations
From a technical standpoint, support around $3,965/oz and resistance near $4,200/oz remain key levels to monitor into early 2026. Short-term corrections may occur as markets consolidate following this year’s strong rally. However, past performance is not a reliable indicator of future results.
Longer-term trends appear supported by sustained institutional demand, easing monetary conditions and ongoing central bank diversification.
While market participants sometimes manage exposure through incremental allocation strategies, such as gradual accumulation across seasonal cycles, this article does not provide investment advice. It instead reflects observed tendencies in how investors manage volatility in cyclical markets.
Key takeaways
Gold and the US dollar have maintained their characteristic seasonal tendencies well into 2025, though the relationship between the two has become less tightly correlated.
Based on historical data:
- Gold’s stronger months: mid-December to mid-April, and August to October
- Gold’s weaker months: May to July, with October often volatile
- US dollar’s strongest month: January
- US dollar’s weakest month: December
While these tendencies may persist, it is important to recognise that seasonality is not predictive. Market outcomes are shaped by a range of evolving factors, including economic data releases, fiscal policy shifts and global events.
Past performance is not a reliable indicator of future results.
Create an account Open a demo account
FAQ
What is seasonality in the gold and US dollar markets?
Seasonality refers to recurring performance patterns that tend to appear during certain months or periods each year. In the case of gold and the US dollar, these patterns are often linked to cultural, fiscal and institutional factors. Gold, for example, tends to rise between December and April, partly due to India’s wedding season and year-end central bank purchases. The US dollar, by contrast, has historically strengthened in January, as US companies repatriate overseas funds following temporary December weakness linked to fiscal-year adjustments.
Is gold’s relationship with the US dollar changing?
Gold and the US dollar have traditionally shown an inverse correlation – when one rises, the other tends to fall. However, recent data indicates a partial decoupling. In 2025, gold prices rose despite lower interest rates and a softer dollar, suggesting that factors such as central bank diversification, geopolitical uncertainty, and institutional portfolio shifts are increasingly influential. This evolving relationship highlights that seasonality is just one of several variables affecting the gold–dollar dynamic.
How can traders access gold and US dollar markets on Capital.com?
At Capital.com, traders can access gold and US dollar markets through contracts for difference (CFDs), enabling them to speculate on price movements without owning the underlying asset. CFDs allow traders to go long or short, depending on their outlook, while using integrated tools such as real-time charts, risk-management features and performance analytics to help manage exposure effectively. CFDs are traded on margin, and leverage amplifies both profits and losses.