Hi,
If you’re tracking gold pricing in recent months, you definitely aren’t alone. News stories detailing record-breaking highs in gold can leave investors in stunned awe. The burning question on every investor’s mind is simple: Did they miss the boat, or is it a good time to invest in gold?
The answer isn’t quite so black and white as it appears on the price chart.
Why Gold Reaches New Highs in the First Place
Gold does not make all-time highs at random moments. Such moments are most likely when a degree of uncertainty is in the air: debt levels, unstable markets, worries over inflation, or internationally generated tension. When people begin to question conventional systems, it is but natural to go for gold.
In other words, high prices can often be a symptom of distress rather than excess.
Acquiring at Higher Prices Versus Acquiring for Long-Term
Many investors are concerned with “buying at the top” when considering a gold investment, but gold is not a short-term trade for most investors. Actually, gold investment is a form of financial insurance in most cases.
Historically, gold has hit new highs, but later on, it went higher in a matter of years. Those investors who had purchased gold in the past at seemingly higher prices have ended up making money just by not getting out.
To gain stability and protection rather than fast money, it’s less important to focus on the entry price than on gold’s function in a given portfolio.
The Cost of Waiting for “The Perfect Price”
One of the common pitfalls is to wait indefinitely for a pullback, which in some cases never happens. Gold does have short-term declines, but many people hold out for a drastic pullback and end up missing out in the meantime.
In an attempt to time it right, investors end up with no positions, which in essence undermines the whole idea of actually holding gold.
Clever Ways of Acquiring Gold at Higher Levels
Buying a whole bunch of Gold in one go may feel overwhelming, especially with prices at higher levels. Here are some different approaches:
Dollar-cost averaging: buying small amounts consistently over a period
Starting small: Fractional Gold bars and coins
Mixing Gold with silver: Diversifying your precious metals holdings
Using these strategies will help one enter the market and not worry about worrying about “timing” the perfect time to buy.
The Verdict: Is It a Bad Time?
Perhaps in short-term trading. However, when considering protection, diversification, and worry-free investments, all-time highs may not pose a problem. Gold has been a tried and tested investment that has broken its previous all time high’s and continues to do so. The better question isn’t “Is gold too pricey?” but “Do I have enough of it?” At AU Bullion, we assist investors of all skill levels in creating positions that make sense, in all kinds of markets, up, down, or in between.
