The best time to sell gold is an intriguing prospect. Whether you’re sitting on gold jewelry that has been passed down within your family or a golden nest egg you’ve invested in on your own, it’s inevitable to wonder when you should sell it. We’ve identified three major indicators for the best time to sell gold; keep reading to find out what they are!
A quick but important note: gold and rare coins should be looked at as a minimum five-year hold. If you choose to sell early, in most situations you will probably see some sort of loss. You definitely won’t realize their full profit potential. Keep that in mind if you’re considering selling recently purchased gold!
An investment in gold can be a handy security blanket if you find yourself in a situation requiring cash on hand. If you are hit by hard times, you can always fall back on gold, even if the market for selling it is not at its peak. Economic conditions will always fluctuate, but you will also always be able to attain value from selling your gold. The best time to sell, in this scenario, is if your personal budget dictates that you should. If selling your gold now will enable you to correct your economic situation and put you in a position to purchase even more gold later on, it could be the right time to sell.
One of the main reasons you should invest in gold is as a hedge against the uncertainty of the economy. When people have confidence in the economy and the U.S. dollar is strong, they invest in stocks and circulate money back into the marketplace. At such times, there is a smaller demand for gold and so the price tends to fall.
When the U.S. dollar is weak and people are not feeling confident about the economic state of the world, they put their money into gold as a form of insurance against inflation. In this situation, the demand for gold rises, impacting the price and potentially increasing the amount you might receive for it.
On the other hand, it’s also a good time to invest in gold when the U.S. dollar is weak. While the U.S. dollar has lost value in comparison to other currencies, it’s still the world’s leading reserve currency. Transferring value from cash into gold while the dollar is weak enables you to feel safe and secure in the long-term value of your holdings, knowing that it can be traded for other currencies if geopolitical causes should have a long-term effect on the U.S. dollar’s stability.
Wait a minute, we just stated that the best time to sell gold is when the U.S. dollar is weak. Now we’re suggesting the opposite. What gives?
The truth is that you can make an argument for either scenario! An important thing to remember in this case is that when gold is sold, what you’re actually doing is making a trade: in exchange for the gold, you will get currency, usually in the form of U.S. dollars. Where you once owned gold, now you own dollars. When the U.S. dollar is strong, it can be more valuable as money than as gold.
The decision to sell gold should not be treated lightly. At the end of the day, the reason you’ve invested in gold is most likely for the security offered by a diversified portfolio. While the price of gold will periodically rise and fall, precious metals will always have value. Ultimately, the best time to sell gold may just be if a true financial emergency has arisen. If you can’t count on the U.S. dollar, you can always count on gold.