Timing is everything in gold and silver investing. To help you buy and invest wisely, we’re sharing the best time to buy gold.
So you want to strengthen your portfolio, but want to minimize risk.
Buying gold is a good investment, as its popularity in times of uncertainty demonstrates. But like many investments, it can difficult to know just when to climb on the bandwagon.
That’s why we’ve put together all the angles you should consider when you’re deciding on the best time to buy gold. Read on to find out.
Why Buy Gold?
Before we get into the best time to buy gold, it’s a good idea to look at why.
The idea behind a commodity like gold is that it holds its value over long periods. Compared to the wild fluctuations that currencies can undergo, gold remains much more steady in the big picture. That’s why gold has played such a vital role throughout history.
Gold isn’t always more valuable than standard currency – fluctuations can mean that currencies gain more value than gold. But gold is less a victim of the boom/bust economic cycle.
As a physical object, gold is also less susceptible to the risks other commodities face. Gold is much less likely to experience supply droughts like oil. It also doesn’t require a constant investment like livestock or other trade goods. And it’s not likely to be destroyed by an act of God. That makes it a great way to protect your portfolio against risk.
It also doesn’t require a constant investment like livestock or other trade goods. And it’s not likely to be destroyed by an act of God. That makes it a great way to protect your portfolio against risk.
When’s the Best Time to Buy Gold?
So with the why established, it’s time to look at when.
Choosing when to invest in gold isn’t simple, and it won’t always be a sure thing. Here are a few factors to consider:
Supply and Demand
It’s an absolute basic of economics, and it applies just as strongly here as elsewhere. By keeping your eye on the market, you can pinpoint when gold’s supply outweighs demand. Then you can invest with the expectation of greater demands later when demand is high.
You’ll want to look to banks for the big picture here. Large banks will ultimately decide the overall supply and demand situation of gold.
Keep an Eye on Trends
Of course, the smart way to use supply and demand is to keep an eye on trends. With a good analytical eye, you can see gold beginning to trend in one direction or the other and get on board appropriately, whether it’s buying or selling.
Part of the trick here is to not confuse a dip or uptick with a trend. Don’t make knee-jerk decisions or you risk overspending. You’ll want to keep an eye on the longer term and inform your decision to buy with data that supports your conclusion.
The Local and Global Economy
The economy at large can have dramatic effects on gold prices. Particularly when a financial bubble pops, businesses like to invest some of their portfolios into gold. As we mentioned, gold’s stability over the long term makes it one of the most reliable goods in human history.
Watch out for these periods and try to make the most of them. Once you’re comfortable with the cycle, you can even pre-empt them. By doing this, you can be in a position to make the maximum possible returns from your investment.
The smart money is on uncertainty when it comes to gold. Doom-and-gloom headlines about the economy and stocks drive gold purchases. Investors see gold as a long-term investment against future shocks. If you want to shore up your portfolio in the same way, then look out for these signs.
The Time of the Year
That’s right, gold is seasonal.
Many investors don’t realize this, so you can be a step ahead by keeping it in mind. It’s been legal to buy gold in the US since 1975. Since that time, March has held steady as the weakest month for gold.
That’s great news for buyers! Buyers picking up gold in March can look forward to huge returns on their investment at a later date. Even at its historically weakest periods, return on gold purchased in March has still been positive.
Your Own Needs
The market shouldn’t be the only factor in your decision to buy gold. A savvy businessman will also be looking at their own portfolio to decide if buying gold is right for them at the current moment.
Like any investment, buying gold comes with risk. If that’s not something you can risk right now, then it’s obviously not the right time to buy gold.
But if your portfolio is doing well, you can put that success into gold. Think of it as safely storing your success away and using it to reach more gains in the future.
How Much Do You Own Already?
Looking at your portfolio is a good way to gauge whether to invest further in gold. If you don’t currently own any gold, diversifying your portfolio could shore you up against sudden shocks in the market. Even if you’re buying high, it might be worth it for that extra security it offers.
Conversely, if you already have 10 percent or more in gold, you might want to put more emphasis on the state of the markets and the economy.
Keeping this kind of flexible approach gives you the ability to adapt and make the most of every situation.
Staying Informed
Finding the best time to buy gold ultimately comes down to staying informed. As gold is constantly on the move, you need to stay equipped with the kind of knowledge that will help you find the best time to buy.
Follow the news – both the regular and financial news. Look for signs the economy is shifting. Financial news will also give you specific news about the actions of gold.
Market alerts and apps can help you receive information quickly and make important decisions. You should also pull data from previous years to analyze trends and gain an idea of likely future scenarios.
Finding the Best Time to Buy Gold
You can tell by now that purchasing gold isn’t always an exact science. But by following this advice and keeping all of the various factors in mind, you can soon find the right time to buy for you.
Be sure to follow our blog for more precious metals news and advice, or contact us to find out what we can do for you!
