Wondering if you should buy gold right now or wait? Even though gold has long lasting qualities, you always want to buy at the best price possible.
It is hard to know when the best price is, unless we look at the historical data of gold to identify if there really is a better time to buy the precious metal. Many would assume that January, and the start of the year might be the ideal time to consider a gold investment. This is only the case if you are buying at the beginning of the January.
Looking at gold prices from 1975 up until 2019, January has historically been a month where the metal starts to soar. It even soars into the month of February. However, after these two months, gold tends to slow down in price starting in the spring and decreases through the summer. The price then picks up again in the fall. This would mean that the ideal buying time, where you may be getting a better price, would be right at the start of January and in the spring through summer.
Since 1975, the gold price has seen a drop in the month of March. In April through June the metal has also been through its weakest, which would be recognized as the second quarter.
2020 is now shaping up to potentially hold another gold rally. The precious metal has been climbing this year on recession alarm bells and panic over the coronavirus. Many gold bulls are betting that in 2020 the precious metal will break the record high it set in 2011 when the price topped $1,900. The metal already surged to seven-year highs this year. According to research by Trinity College, gold represents the best hedge if there were to be a market crash. The coronavirus selloff in March destroyed many stocks. Trinity College found that after a crash, gold prices increased substantially for 15 days!
The Fed also slashed interest rates to zero this year and the lower the interest rates means there is less reason to hold onto non-yielding bullion. Oil prices also falling dramatically have sent investors scrambling to buy gold as a safe haven.
It was in 2019 that China’s central bank poured its money into gold as a buffer against the U.S. trade war and pushed the price of gold to its highest level since 2013. Political uncertainties such as this, have a tendency to push the price of gold higher. An uncertain atmosphere is what helps gold strive. Plus, with this being an election year and the world facing the ongoing coronavirus pandemic, gold could be set for a major rally. A key focus of study over the last several decades have found that election years have shown to be of significant influence on gold’s price.
It also helps that the CEO of US Global Investors, Frank Holmes, has predicted that gold’s true value is as high as $10,000. Veteran investor and vice chairman of private wealth solutions at Blackstone Byron Wien, also told CNBC’s “Squawk on the Street” not long ago to “Watch gold in 2020” as it “has a chance to be an interesting investment.”