Jeff Clark, Senior Precious Metals Analyst, GoldSilver
APR 16, 2017
Should you buy gold and silver today? Or wait to buy in the future?
We all want the best price we can get on our precious metals purchases. And timing can be an important factor when investing in gold and silver.
I looked at the historical data to identify the best time of year to buy. I suspected January would be best, but what I found was interesting.
We calculated the average gain and loss for every day of the year since 1975 (when it was legal to buy gold again in the US) and put it in a chart. Here’s what it looks like.
You can see that on average, there’s a nice surge the first couple months of the year. The price then cools down through the spring and summer, and takes off again in the fall.
Should you invest in gold now?
Well, the lowest price of the year—and thus the best time to be investing in gold—is the second week of January.
But it’s also good in mid-March and early April. The second week of July is probably the “last train out” before gold takes off in fall.
*For more information on which seasons are best for investing in gold, consult this article.
What’s also interesting is that the gold price, on average, does not historically revisit its prior year low. The low of the year is indeed in January—but it’s the low of that year, not the prior year.
So your best bet is to buy gold at these low points during the year, and also to not wait for the following year.
Obviously there were years where the gold price did fall. But there were also years it soared. Smoothing out all those surges and corrections and manias and selloffs, investors are, on average, better off buying the prior year than waiting for a downturn the following year.
Gold prices are indeed seasonally weaker in the summer, but they still don’t touch the prior year’s price. Meaning, you are likely to pay more in the summer even then than during an upswing in the current year.
The conclusion on when you should be investing in gold is simple:
• On average, you’ll likely get the best price on gold in early January, mid-March, early April, and early July. You’ll also want to buy this year and not wait for next year.
We ran the same data for silver and here’s what we found.
It’s easy to see silver’s higher volatility. And that its annual low is clearly in early January. About the only other good time to buy, on average, is when it dips in June, though you’ll likely pay a higher price then than January.
What also sticks out is that historically, silver doesn’t come close to touching the prior year’s price.
Should you invest in silver now?
As with gold, there were certainly years where the silver price fell below where it started. But the historical data says that on average, it rises more often in the following year than it falls.
You are thus better off investing in silver now than waiting for a dip the following year. If you wait, history says you will likely pay a higher price.
The conclusion here is obvious. While there are always corrections along the way…
• On average, you should get the best price on silver in early January and in June. And like gold, you want to buy this year rather than waiting till next year.
Of course, any correction is a buying opportunity if you don’t have enough bullion to offset an economic or monetary crisis. In that type of environment—and one we think is inevitable—physical gold and silver investments are one of the few assets that will prevail.
Mike and I and everyone else at GoldSilver continue investing in gold and silver regularly. We’re not waiting. We’ll buy more if it falls, but the point is, we’re prepared for the future now.