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Home » Buying Guide » When Can You Buy Gold?

When Can You Buy Gold?

Is there a specific time during which gold should be bought? Should market statistics be considered when buying gold? These are some of the questions that most gold bullion investors ask. The answer to these questions is not relatively easy because there are several factors that one needs to consider.

The first and foremost is relying on historical data related to the rise and fall of gold prices in the bullion market. According to the historical data, one of the best times for investing in gold bullion was 2005-2006 because after this period price of gold kept rising. During this period, the price of gold did not fluctuate and stabilised at £250 troy ounce (T/Oz). Again, in the period between 2007 and 2008, price of gold hit rock bottom because of the UK banking crisis. The year 2007-08 presented a great opportunity for investors to buy gold and stock bullion because the price was hovering around £350 T/Oz.

The period between 2007 and 2009 was also the period of the great recession when UK and the rest of the world saw a severe economic decline. The gold price started to increase only around February 2009 and remained stable till November 2009. It increased further in December 2009 and since then it has been increasing. Now is that good or bad for investment?

The truth is that most new bullion investors are unaware of the fact that the best time to invest in gold is when the price of gold falls. You need to invest when the price is low and sell when price is high. That is the way profit can be made from gold bullion. When the great recession took place and the price of gold fell, only smart investors were able to jump onto the bandwagon. Some investors who have been in this trade for long enough were able to identify the tell-tale signs and took advantage of the price fall. Since then the price of gold has actually risen by 230% making it one of the most profitable investments ever.

Now the most important question is whether current gold prices are going to remain as they are or will there be a fall in the price? It is never an easy task to answer such a question because there exists no methodology to predict the rise and fall of the gold price. Of course, many investors and market experts can speculate but it is not necessary that their speculation will hold true.

Should I buy Gold when price is rising?

Are you wondering whether you should buy gold right now because gold price is showing an upward trend? The fact is that price of gold has been rising since end of 2009 and it is expected to rise even more. This upward trend is considered long term because the rise has been consistent for 4 years now. If you plan to buy now, one of the important things to remember is that gold prices may dip in a month’s time. It may dip by 2%, 5% or even 10%. The important thing is to remain calm and not be overwhelmed by the fall in price. If gold prices fall then they will definitely rise again. This type of sudden fall has been seen in the recent past and might occur again.

As an investor, you need to understand that the price of gold goes through several short term small dips as well as short term or long term increases. Secondly, if you are planning to invest in gold then it should not be regarded as a short term investment. It is always recommended to hold gold bullion for as long as possible with the minimum period being 6 months to 1 year. The longer you can hold on to your gold bullion, the better the returns would be.

If there is a short term dip in the market due to uncertain market conditions or economic woes then it would be a great opportunity to buy more gold. How do you recognise such a situation or how to get a whiff of an economic crisis before it happens? There is no perfect way to recognise that but you can always keep an eye on economic and financial news on television and through newspaper and magazines. You can even check out the news from major financial regions like the Wall Street, top banks, London stock exchange etc.

If you are hearing a lot of negative messages revolving around excessive credit burdens, loans, debt, real estate, political unrest, economic slowdown, inflation, and unemployment then there is a high possibility that gold prices will take a dip. Another way to find out if gold prices are going to fall is by checking out how the property market and share market is performing. If there is a slowdown in the property market or fall in the stock prices of large multinationals then silver and gold prices will rise. This is because big time investors as well as large corporations use gold as insurance against fighting losses incurred elsewhere.

Are there any gold buying guidelines to follow?

There are no specific guidelines that you can follow when investing in gold bullion. Of course, there are a few important aspects that can help you make informed investment decisions. One of the foremost aspects is to buy gold in smaller quantities and on a regular basis. You don't have to always invest in buying gold bars. You can buy gold coins every now and then or once every quarter and keep adding that quantity to your existing gold bullion. This has two advantages - one is that your gold investment portfolio will increase and secondly the amount of investment you make on gold will not affect your financial stability.

The second aspect to consider is keeping abreast with the market trends and price rise of gold on a daily basis. The current level of UK Gold price is £1060, which is up on last month (1055) and up on compared to March 2012 which was £1053. You need to constantly check how the gold price is doing. There are some investors who buy gold when the price dips while others buy when it is right in the middle of a strong period. As an investor, when you would want to buy gold will completely depend on how well you are able to keep track of the market trends.

Last but not the least; you need to understand that gold is a precious and timeless asset. Even when the market looks bad enough, you can be hopeful of a rise in price. You can keep gold bullion for as long as you want. Keeping gold for longer periods is highly recommended because gold prices can rise quite high within a 4 to 5 year period and this can result in greater profit.

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