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Posted on: 14 April 2017

In order to maximize your profit when buying gold, it is important to know the best time to purchase it. This requires that you not only follow gold but also world events.

Look For Upward Trends

January is the best time of the year to buy gold. But when determining whether it is a good year to buy gold, you will want to look for when gold is on an upward trend. Do not worry about when gold dips by a few percentage points in one month because this is normal. Instead, focus on when the gold begins to rise over a long period. Gold is not meant to be a short-term investment. 

Look For Uncertainty

The best time to purchase gold is during a period of uncertainty. A good recent example of uncertainty that lead to a potential increase in the value of gold was the Deutsche Bank's potential liquidity. To make sure that you are always prepared for periods of uncertainty, read the news, especially world news, to have a sense of when a new financial crisis may come about. Look at the value of currency, how well stocks are performing, the amount of debt held, unemployment and whether there is quantitative easing. Gold is often purchased by companies as an insurance policy against losses elsewhere. 

Look For Gold Shortages

Pay attention to when there is a shortage of gold. Gold is just like any other commodity and is subject to the laws of supply and demand. Therefore, if there is a reason to suspect that there is less gold than what would normally be expected, it might make sense to purchase gold because its value will go up.

Pay Attention To Inflations

Gold buying is an important hedge against inflation. During quantitative easing, governments print large sums of money. This can lead to the value of the dollar devaluing. However, if banks are not creating large sums of money through a credit boom, this can offset the increase in money that is being printed through quantitative easing, so there may actually be less inflation and gold may not be as valuable to purchase under this circumstance, though it is still recommended that you buy some gold. 

Another strategy is simply to buy gold whenever you can. Purchase small quantities of gold. The point of owning gold is to have a safe, secure asset that will keep your assets safe during a crisis, even if it will not necessarily make you rich. To learn more, contact a company like Beaverton Coin & Currency.