Jeff Clark, Senior Analyst, GoldSilver
Can’t decide if you should buy gold now or wait?
Even though physical gold and silver have long-lasting qualities most other investments don’t, we all want the best price we can get. It’s only natural, and any good consumer will consider the timing of their buying decisions. It’s a question almost every investor asks before executing: Even if I get a good price now, will I be able to get a better price later?
Well, history has an empirical answer for you.
I looked at the historical data to see if I could identify the best time of the 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 shows.
You can see that on average, gold tends to surge during the first couple months of the year. The price cools down through the spring and summer, then takes off again in the fall.
This means that on a historical basis, the best times to buy gold are early January, March and early April, or from mid-June to early July.
You can also see the price 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 previous year. Obviously, there were years when the gold price did fall—but there were also years it soared. Smoothing out all those surges and corrections and manias and selloffs, investors will get their best price at the very beginning of the year, or the year before.
We ran the same data for silver and here’s what we found.
It’s easy to see silver’s higher volatility. What also sticks out is that historically, silver doesn’t revisit its January lows. The only other best times to buy, on average, is in March or late June.
As with gold, you’ll notice silver typically doesn’t come close to revisiting its prior year price (though there were certainly years when the price of silver fell below where it started). The historical data says that on average, investors will get their best price in early January or the prior year.
If you missed buying gold in January, when is the next best time to buy?
We broke the historical data down into months, and here’s what it shows.
Since 1975, the gold price has tended to drop the most in March. The daily chart above shows April might offer a slightly lower overall price, but history shows March is the month gold falls the most and is thus one of the best times to buy.
This trend does not apply to silver.
While the silver price is typically flat in March, the best month to buy is June, followed by October. The wisdom of buying in June is further supported by the daily chart above.
We also looked at which quarter of the year is the best time to buy gold. Based on the charts above you can probably guess when that is…
Since 1975, the first half of the year has clearly been weaker than the second half, and thus the best time to buy. The third quarter (July through September) has been gold’s strongest.
There are a couple conclusions we can draw from the historical record.
Buy gold and silver in…
In the big picture, however, it’s less about snagging the exact bottom and more about how many ounces you own. Remember, gold is inversely correlated to other investments, including stocks, so you want to have a meaningful amount of bullion before a stock market selloff takes place. If you don’t, the price of gold could very well leave you behind, forcing you to pay not just a higher price but a higher premium.
(If you’re not sure where to start, try this guide that many have said they found helpful.)
We’re not waiting. We’ll buy more if it falls, but the point is, we’re prepared now for whatever the future may hold.
I hope you are, too. If not, I encourage you to buy physical gold and physical silver now to protect your family’s wealth. And if you’re concerned about how much you’ve got stashed in or around the house, “think like Mike” and consider our surprisingly affordable storage program.
While gold and silver bullion should be considered long-term holds, there will come a time when you may want to sell. When would that be? Probably one of two occasions…
An active investor with a love of writing, Jeff Clark is a globally recognized authority on precious metals. As the son of an award-winning gold panner, with family-owned mining claims in California, Arizona, and Nevada, Jeff has deep roots in the industry. Jeff regularly speaks at precious metals conferences, serves on the board at Strategic Wealth Preservation in Grand Cayman, and provides exclusive analysis and market commentary to GoldSilver customers. Follow Jeff on Twitter @TheGoldAdvisor