When To Buy Gold And Silver

Have you been wondering when the best time to buy gold or silver is?

If you’ve been watching precious metal spot prices over the last few weeks, since the slight rally in prices after Trump’s election, you’ll have seen that the price of both gold and silver have been trending steadily downwards.

So should you pull the plug and buy today?…or wait until tomorrow and see if the price has dropped further?

Everyone wants the best price they can get on gold and silver purchases. It’s only natural, and any good consumer will consider the timing of their buying decisions. It’s a question almost every investor asks: am I getting a good price now, or will I get a better price in the future?

History, it appears, has an empirical answer for you.

In preparation for the new year, Jeff Clark, Senior Precious Metals Analyst over at GoldSilver.com took a look at the historical data to see if he could identify the best time of year to buy. Apparently, he’d suspected that January would be best time…

He 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:

Average Price of Gold 1975-2016

On average, there’s a nice surge in the first couple months of the year (click the chart for a larger view). The price then cools down through the spring and summer, and takes off again in the fall.

You can also see 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.

All this means that you are likely to be better off buying in 2016 than in 2017.

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 sell-offs, investors are, on average, better off buying in the prior year than waiting for a downturn the following year. 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 even then than now.

The conclusion is simple:

  • On average, you’ll get a better price on gold now than in 2017.

He ran the same data for silver and here’s what he found:

Average Price of Silver 1975-2016

The first thing to notice is silver’s higher volatility. What also sticks out is that historically, silver doesn’t come close to touching the prior year’s price.

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.

So, we are therefore much better off buying silver now than waiting for a dip in 2017. If you wait, history says you will likely pay a higher price.

The conclusions here are obvious. While there are always corrections along the way…

  • On average, it is cheaper to buy gold and silver the year before.

Whatever you want for 2017, you will likely be better off making those purchases now rather than waiting until next year.

Combine this data with the current correction and you have the perfect Christmas gift for yourself: gold and silver on sale, with much higher prices coming over the next few years.

Mike Maloney and David Morgan discuss a vital issue that affects everyone. This is an excerpt of Mike’s appearance at the 2016 Silver Summit. If you missed any bonus features or his keynote presentation, be sure to watch them.

Of course, the best way to mitigate the volatility in price is to do dollar cost averaging – spending a set amount regularly to buy precious metals, like $250 per month buying gold or $20 a week buying silver. Stick to than plan and when prices drop, you get more metal for your dollars. And when prices rise, the extra metal you bought at low prices will be worth more at a higher dollar price.

Using the dollar cost averaging approach, you’re never at the mercy of the market, trying to guess the best times to buy and sell.

To follow this approach, open a gold savings account and regularly buy gold. GoldMoney (formerly BitGold) is still the cheapest way to do this. You can buy with a credit/debit card, wire transfer or Bitcoin. There’s only a 0.5% (half a percent) fee on transactions, much cheaper than the premiums you pay when buying gold coins or bars.

Check out my GoldMoney review if you think this is something you’d be interested in. Dollar cost averaging is what I do now myself with my GoldMoney account.