Gold and silver have always been attractive investment options. The quality of these two precious metals with regards to their store of value and their acceptance as a currency secures their position in the investing world. Despite the advantages and value of gold and silver, investment in them is not as straightforward as one might think.
The fact that gold and silver prices have seen an upward trend in the long term, and especially in the last two decades, doesn’t make them immune to the downward trends, especially in the short term. It is the reason early investors and market students are always seen looking for answers about when it is best to buy gold and silver.
Let’s discuss some basics about investing in gold and silver first.
The first thing you have to keep in mind is that the spot prices of gold and silver have seen an upward trend since 2000. However, this should be used as a variable in the investment equation rather than a decision making factor. It is true that future prices and trends can be predicted from historical trends, but the short term fluctuation is an entirely different matter.
Another important thing about gold and silver is their ratio of prices. The Gold-Silver Ratio has been used as an investment strategy by investors to anticipate when the relative price of these metals is going to change.
Liquidity also holds importance when we talk about gold and silver. Precious metals are accepted anywhere in the world and can easily be sold when the funds are needed for other purposes or when the gold and silver are to be laid off to earn a profit. Although investing in gold and silver is an adventurous and exciting activity, it comes with some additional costs.
Storing precious metals in a secure facility can be expensive, depending on the location of investors. This factor is also a decisive one while choosing gold over silver. We know that gold is worth much more than silver and is also denser than silver. It means that gold takes much less space to store than silver. These are some of the important factors affecting investors’ decisions while choosing between gold and silver.
Precious metals are seen as a store of value and secure investment as compared to stocks and other financial instruments. Gold, in particular, has an inverse relation with the market. Whenever the market is not behaving well, normally gold prices jump. Gold is the most favoured investment choice in uncertain times.
Keep a keen eye on what is happening and what is going to happen in the near future. The market is affected by natural, political, social, and diplomatic activities. Investors act swiftly in uncertain times, so the prices of gold can go up or down in a matter of minutes or hours. Your decision to buy gold or silver acts as a guide for when to buy them.
If you are looking for a portion of your portfolio to be invested in gold and silver, then you should consider the long term upward trend of prices of these metals. If you are investing to earn money in the short term by using price fluctuations, you should keep a close eye on the market and follow investment news to know when the time is right to invest in yellow and white metal.
Although there is no way to predict the perfect time for investing to the exact days or hours, the historical data shows us that early January and March is the time when the price of gold is low during the year.
If nothing unusual happened during the second half of the year, the price of gold keeps on increasing before dropping again in January the next year. For silver, history tells us June is the time when the prices are mostly lowest during the years since 1975.
Lastly, if you have made up your mind about investing in gold and silver, then find the right window during the year and make a move.
