by Jeff Clark, 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?
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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 low. 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.
Best Month of the Year to Buy Gold
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.
Unlike gold, the silver price is typically flat in March. The best month to buy silver is June, followed by August and October. The wisdom of buying in June is further supported by the daily chart above.
Best Quarter to Buy Gold
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 second quarter (April through June) has clearly been gold’s weakest and is thus the best time to buy. The third quarter (July through September) has been gold’s strongest.
The Best Time to Buy Gold Is…
There are a couple conclusions we can draw from the historical record.
Buy gold and silver in…
- Early January, March or April, and late June. The data show that you want to be fully positioned in both metals for the year before August.
- This year instead of next year. You are likely to get a better price this year than by waiting till next year. Whatever amount you want for your long-term holdings, buy it this year.
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.