The prices of gold stocks and physical gold are already at record levels and are expected to increase much more in the near future. Purchasing gold now before prices rise higher can make all the difference in terms of return on investment. But what is the secret to buying low? The truth is, there isn’t one and the best method involves almost no method at all.
Getting gold at the best price entails purchasing gold and gold stocks during significant price pullbacks. This technique does not involve any technical analysis or trading on the part of the investor. During the bull market of the past nine years, the months of June and August have been the weakest for physical gold prices. In terms of gold stocks, April, June, July, and October have been the weakest months since 2001.
Since 2001, in the spring and summer, prices seem to peak in May and then drop over the next few months. The smallest summer decline in the past nine years was 2.2 percent, the biggest 27.8 percent, and the declines during these months averaged 8.9 percent. The months when gold has the lowest average rate of return are some of the best times to make an investment in the precious metal. Though these are only price tendencies, they can be examined to detect times of price weakness. However, they should not be used for purposes of trading or to predict an immediate gain.
Analysts recommend purchasing gold and gold stocks while prices are on the decline rather than waiting for the largest price drop to occur. Waiting may mean not making a purchase and then having to chase gold stock as the price goes higher. These experts repeatedly stress that this information should be used only to add to an investor’s current positions.
In light of a possible resurgence of the currency crisis that could eventually affect the U.S. dollar, investors should sink some money into gold and gold stocks now. This will put them in a comfortable position as gold prices jump higher. In this market, investors should have a portfolio that includes holdings in precious metals like gold.
Source: Clark, Jeff. Casey Research.com. Is Now a Good Time to Buy Gold?
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