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What is the Best Time to Buy or Sell Gold

Catherine Tramell
Catherine Tramell

Last updated 28. april 2022

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Gold investors do not benefit from dividends or similar returns. The primary or perhaps the only way to benefit from gold investments is through capital gains — the price difference between the cost price and the selling price of the metal.  

If you manage to sell gold for a price higher than you purchased, there’s your capital gain. If your selling price is lower than your cost of procuring the metal, you’ve incurred a loss. Therefore, buying gold at the right time and selling it during the most opportune time is critical to benefit from the precious metal investment.

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In this article, you’ll learn:

  • The right time to buy or sell gold.
  • The various forms of gold you could procure and later sell.
  • How to predict gold price movements to execute your moves and benefit from them.
  • Answers to a few pertinent questions about the topic.

Irrespective of whether you’d like to flip gold, procure it for the long haul, buy gold in the metal and/or paper, etc., the following piece of information is likely to be your treasure trove.  

Different Forms of Gold Assets You Can Buy/Sell

Gold can be procured as gold bullion coins and bars, jewelry, gold stocks, gold ETFs, etc. If you’d like to invest in the metal, gold bullion is the best route. If you’d like to wear your gold and are not very particular about the investment aspect, gold jewelry will suit your needs better.

If owning actual gold doesn’t grab your fancy, and you’re okay not being able to see and touch your gold, look to gold-based stocks, futures, ETFs, etc. Kindly note, both physical and paper gold come with their positives and drawbacks.

Physical Gold

Real gold could be jewelry or gold bullion. They could be purchased through a local or online dealer or collector, pawnshops, etc.

When you purchase gold in the metal, you get to touch the gold and derive satisfaction from the fact that you own an actual piece of gold. However, owning physical gold means securing the metal, buying insurance, etc. Also, the piece of gold will be beneficial investment-wise only if you hold on to it for a considerable period.

Jewelry, as stated earlier, serves a different set of buyers altogether and shouldn’t be considered for investment reasons. Although jewelry doesn’t necessarily depreciate, it’s no comparison to gold coins and bars, which are a lot purer and devoid of elements that don’t add investment value.

A gold coin is the gold bullion of choice since it has a numismatic value, which could be greater than its melt value. Gold bars are usually nondescript or have no historicity attached to them and are priced purely for the gold they constitute.

If you’re not a collector and want to own gold to benefit in the long term from rising gold prices, a gold bullion bar would be ideal. Gold coins provide capital gains too. But steer clear of the rare or historically significant coins, for which you may have to pay a considerable premium.  

Paper Gold

Paper-based gold could be gold stocks, gold ETFs, etc.

Gold stocks work like regular stocks. The only difference is its share of a company in the gold business. If the company produces more gold and increases its revenues, its stock prices will increase, and you’ll benefit from that appreciation as the shareowner. The company could also pay dividends, which is essentially additional income. Also, a gold stock could be bought and sold anytime, quickly. Selling gold in the metal for the right price could entail waiting for the right buyer and price.

But there are also downsides to gold stocks. If you’re not a keen stock market investor, you shouldn’t be trading gold-based shares. The price of your stocks will go up and down just like any other stock. If you ditched stock exchange trading because you didn’t have the appetite for its unpredictability, you would also despise gold stocks. 

Gold ETFs (exchange-traded funds), on the other hand, track gold’s price performance. An ETF is based on an underlying asset. The asset could be bonds, stocks, commodities, etc. In a gold ETF, the base is gold.

The fund provider, or owner of the asset, devises a fund that tracks the asset’s performance and sells the fund’s shares to multiple investors. As a gold ETF investor, you own a part of the ETF but not the underlying gold.

Like gold stocks, a gold ETF also doesn’t result in ownership of actual gold. However, compared to a gold stock, a gold ETF is low-risk since its performance is directly correlated to gold, which doesn’t vacillate as vigorously as the shares of a company.

If you don’t want to own gold in the metal and do not want to be exposed to the vagaries of the stock market either, a gold ETF is your ideal in-between investment vehicle. And like stocks, you can sell and buy gold ETFs anytime without incurring additional costs.

The Right Time to Purchase Gold

The right time to buy gold is when its prices are low, usually during the year’s first half. If you look at the gold price trends from 1975 to 2020, prices go up after a week post-New Year. Prices tend to surge during early January and increase until the beginning of March.

Right around the mid of March, prices dip. From mid-March and early July, gold prices remain relatively low and stabilized. Gold prices start to increase again around late June or early July and keep rallying until the end of the year. Gold rates peak during the last three months of the year.

While there’s no scientific evidence denoting why is that it’s safe to assume the festivities that usually take place during the end of the year in most parts of the world contribute to the greater demand and the resultant increase in the price of gold.

Therefore, if you’re looking to buy gold for the best or lowest possible prices, do it during the first half of a year — March to July or the second quarter of the year is the most opportune time. Right after the New Year or the first couple of weeks of January are also ideal. The absolute low is during the first half of January after all the events and celebrations have concluded.

Kindly note, the above recommendations are purely based on historical trends. Though discrepancies are pretty possible, current and future gold prices will likely conform to past movements.

If you are not a gold investor or predominantly buy gold as jewelry, any month of the year is an excellent time to buy gold. While you could buy gold during the second quarter of the year, the trendiest gold jewelry may arrive only during the fourth quarter. If you don’t mind paying a premium for the latest designs, go ahead with the purchase.

Buy Gold in Increments

Small changes done consistently over a period result in significant outcomes.

To benefit from gold, you need not purchase gold in relatively large amounts or at once. Buy gold in small quantities. And do that regularly, or every time there’s an opportunity to buy gold for an attractive price.

Your average purchase price would be relatively low by not buying gold in a single transaction and spreading out the purchase to multiple transactions. That essentially means you need not worry much about the purchase period.

The Best Time to Sell Gold

Considering the information above, it only makes sense to sell gold for a higher price or during a bullish trend. But that is if you’re on the lookout to sell gold.

Except during a financial or medical emergency, holding on to gold is highly advised. Most importantly, never buy gold to sell it in the short term. Gold is not meant to be invested in temporarily. The minor price gains will not make you rich and certainly won’t cover the costs attached to procuring and storing gold.

But if there is a tremendous spike in the price of gold and the price difference is greater than your purchase price, go ahead with the sale.

If you’re looking to sell gold because you must, finding a buyer should not be that difficult due to the perennial demand for precious metals in the market, particularly gold. Physical gold – whether they are in a private vault, an IRA, at your home, etc. – can be easily turned into cash. You can sell paper gold even more quickly.

Gold Has Gained Slowly, But Surely

Gold has historically been on a slow rise. Gold prices today would most likely never go down to the price points of the 1990s, thanks to inflation and the increasing demand for the metal. Even if there are dips, those would be minor and will get corrected over time. The price rises would, in fact, more than compensate for the falls — which is why gold has managed to increase in value over a period.

Foretelling Movements in Gold Price

To truly benefit by selling gold or buying gold at the correct prices, it’s essential to be ahead of the curve or predict gold price movements with some level of accuracy.

Unfortunately, ascertaining the right time to buy or sell gold is not that easy since there are no real signs or insights on the movements in gold and silver prices, unlike stocks. A company’s business tactics, performance, etc., provide some clue about whether its shares will go up or down.

If buying gold through stocks, such as the shares of a gold mining firm, ascertaining when to buy more shares of the company or sell the ones you already own could be relatively straightforward, provided you are up to date with what’s happening. Predicting gold stock’s price movements will be challenging if you’re not in line with the market’s trends and activities.

As far as predicting physical gold prices is concerned, there are certain things you could do to guestimate value. Again, the name of the game is staying on top of the trends and headlines. Read the news and look out for important announcements from banks, governments, Wall Street, etc.

Negative political and economic messages on currency, stocks, credit, property, etc., denote unrest and a likely rise in gold prices. It’s a rule of thumb that gold and silver prices go up when the financial market is underperforming or going through a slump. The period is perhaps the right time to buy gold or not sell any of your gold assets.

Pandemic-like scenarios also drive gold prices. Gold prices reaching a new milestone during such periods is not unheard of. Gold enters new trading territories during testing times, causing gold demand and its costs to go up and remain above a certain threshold even after the economy is back on track and unemployment rates have come down.

Monitor Gold Prices

Besides the above, also keep a close watch on the current gold price. Gold prices tend to move every few minutes. A 3 to 5% fall in the price of gold within 24 hours is not rare. Therefore, paying attention to the price movements would help you zero in on the right moment to purchase or sell gold for the best price.

You need not be glued to your computer or smartphone monitoring gold prices. If you are not a gold trader or have a day job, round-the-clock monitoring will not be feasible. But if you’ve been reading economy news, you would be able to tell when the rates are likely to waver more. You could spend more time watching the prices then.

Conclusion

While there are economic scenarios during which selling or buying gold would seem advisable, it’s generally recommended to hold on to your gold coins and gold jewelry for as long as you possibly can. Gold is a precious commodity. You must stay invested in it for long and preferably pass it on to the next generation.

But if buying or selling gold is something you’re looking at keenly, it’s recommended you do not do it hastily and understand the market better. If assessing the gold industry is something you’re not down for, gold may not be the ideal investment for you. Look to the forex market and other investments or other asset classes instead.  

If you’re buying gold to save for retirement, procure gold through a gold IRA. A precious metals IRA lets you bundle your gold investments with other precious metals, such as silver bullion, platinum, etc. Click on the respective links to learn more about them.

FAQs

Do prices of other precious metals sync with gold prices?

The price movements mentioned above are not unique to gold. The demand and value of other precious metals also observe similar trends.

For example, silver price goes up significantly during the latter part of the year compared to the beginning. However, when compared to gold, silver rallies a bit more strongly during February and the other months during the first half of the year.

Should you be wary of the time of the year when buying gold?

Even though specific months or periods of the year are ideal to buy gold, you need not adopt a meticulous approach or strategy to buy gold, silver, or any other precious metal.

If you have the funds and want to buy gold and stay put in it for long, go ahead. There is no right or good time for gold buyers with a long-term outlook. Only people with a short-term view need to be particularly wary.