When to comes to investment, precious metals, especially gold is something that attracts an investor who is looking at highly profitable options. Though it is not wrong that gold fetches high returns, it happens only when you do it right, and doing it right depends on when you’re investing. If you are someone who aspires to begin to invest in gold, or increase their profits, it is always confusing as to when you should buy. Though it is a little technical, investing in gold is always a very interesting decision to make.
If you are confused with the big stock & bullion market jargons, here are 7 things you need to take care of. These are 7 signals that tell you what is the right time to buy gold and silver.
1. When the stock market looks shaky
So, usually when the other stocks are very unstable, most investors use gold to cushion their losses by investing in precious metals, especially gold. This is the right time to take advantage of the unstable market.
However, in order to know when this period of instability comes, you need to keep track of the market and be up to date with stock trends, so you make no mistake.
2. When gold to silver ratio is low
Gold to silver ratio means the amount of silver ounces it takes to purchase an ounce of gold. When this ratio is low, it means gold is cheaper than silver, which in turn means that the ratio is gold-friendly.
Similarly, when gold to silver ratio is high, it is silver-friendly, so you go short on gold and long on silver.
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3. When gold rate is lower than the rate at which you last bought
This one comes with a lot of long-term trading experience. The basic logic behind this is the anticipation of a bounce back in gold price after gold falls below the price you last purchased it at.
4. When gold market is showing a bullish tendency
If you have been accustomed to the stock market, you would be familiar with the basic terms ‘bull’ and ‘bear’. The same goes for the bullion market as well. So when the market is showing a bullish trend, which means more investors are selling gold. This makes it the perfect time to buy, because this bullish trend will result in a lower rate for you to buy, followed by a bearish trend, when more investors buy gold, thereby increasing the gold rates.
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5. When gold has been on a higher price for a long time
You know that the future of this is going to be a fall in price after the peak. That will be the time when you go long on gold, making the most of your waiting. This is something that relies partly on market research, past trends, and your understanding of investor behaviour also.
6. When gold price is at or below the moving average
For this, you have to first calculate the moving average and compare the price of gold with it. If the price is equal to or lower than the 200-day moving average, it is your time to go long. For this very calculated decision-making process, you regularly need to follow gold prices. One place where you can get LIVE regular updates on gold prices is Augmont App, which you can install on your phone itself!
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7. When to sit back, and hold on to what you have
It’s not always about trading when it comes to the bullion market. There are also times when you need to have patience, not selling or buying. Those are the times either when the market is too volatile to risk it, or when you’re looking at much bigger profit margins on your investment, which is only possible in the long-term.
We believe you are well-equipped with some of the big technical specifics of the gold and silver bullion marker, and know when to go long or short. Share with us your own personal ways to calculate the best time to invest in gold or silver. Also, comment with any other questions that arise in your mind, our experts would be happy to help.
Happy investing!
Read more: Things to Know Before Investing in Gold