*Disclaimer: Individuals should always consult with a financial advisor prior to making these decisions. This is not financial advice.

Consider this a trick question! The best answer is, if you’re investing in precious metals diversifying your portfolio and holding onto gold or silver in the long run, the best time to buy gold is in set intervals to take advantage of dollar cost averaging which is the practice of investing a fixed dollar amount regularly regardless of share price. In the long term, the share price will average out and offset large dips or rises in investments. Adding gold to your portfolio regularly mitigates timing risk and spreading out your purchases will offset the risk of short-term market volatility. Dollar-cost averaging is good for long-term investment strategies.  

However, if you’re dead set on beating the market, you can analyze historical data on gold prices over the past years and spot trends to pick the best time to invest. 

Historical Data 

Historically, data suggests that the end of the year might be the worst time to buy gold. Gold prices tend to rise in the last quarter of the year because of a surge in gold demand in some of the world’s largest gold markets - namely India and China. When the clock strikes mid-October, you can expect India to celebrate one of their biggest holidays, Diwali, the festival of lights. Many celebrating this holiday would give gold as a gift to their family and loved ones as a way to ensure good luck and prosperity. After Diwali, in January, China surpasses India as the largest importer of gold due to preparations for the Lunar New Year, which historically falls between late January and early February. Likewise with Diwali, receiving gold during Lunar New Year is a token of good luck, prosperity, and wealth in the future. Retailers and gold importers begin buying large quantities of gold during August and September for Diwali, and January for Lunar New Year to meet the high demand for gold during these two holidays. The surge in demand for gold historically inflates gold prices, making it a good time to sell gold, but not buy. The increased demand and shortage of gold causes retailers to charge a larger premium on gold, making it more expensive to purchase. 

So when is the best time to buy gold according to historical data? A review of the historical gold charts can give you a general insight into the lowest average monthly gold rate. 

Lowest Average Gold Prices

Historical data presents that the best times to buy gold are either at the beginning of the year when gold is recovering from a slump after the Lunar New Year Rush or at the end of the year after Diwali. It may be best to observe prices during the first quarter of the year from January to April and find a time to buy gold when you’re ready to invest. Although gold prices may go down in the short term, remember that in the long term, gold prices will always increase due to industrial uses and demand from other investors. Therefore, if you hold gold in the long run, you can average the dollar cost of your investment and not picking up on gold’s lowest lows will be negligible in the long run. 

Situational Factors 

These factors can predict when the price of gold is going to go up. Buying gold before the prices skyrocket is a good way to maximize the value of your investment. 

It’s impossible to predict market trends accurately, but there are a few telling signs of market downturns. Gold is used as a hedge against inflation and a store of value in turbulent times. When the economy is uncertain, or the stock market is down, that is when gold shines the most. Gold has an inverse relationship with the stock market and according to GoldSilver, during the 2008 recession while stock value was down, gold value went up by 25.5%! Gold also has an inverse relationship with the US dollar. A weakening US dollar makes gold more attractive to foreign buyers, increasing demand for gold, and inflating its spot price. You might notice rising prices because of economic uncertainty, increased pressure from inflation, and geopolitical tensions rising globally. If you seize the right moment to buy gold, you can benefit from the upward mobility of gold and preserve your wealth. 

Regardless of the month or time of the year, you shouldn’t be too focused on buying gold when the price is low. Don’t be swayed by short-term price fluctuations, gold is a long-term asset and has intrinsic value and will be back on an upward trajectory in the future (market cycles). Hold gold for the long run and it will pay off for you!