When is the best time to sell gold?

Like most markets, gold prices go up and down and what you get for your gold today might be different to what you get for it tomorrow.  But what determines this? How can you know when it’s the best time to sell gold?

Gold prices increase in times of economic uncertainty

Gold is traditionally seen as a “safe bet” for investors.  When the economy is doing well, investors may turn to riskier investments that net them higher rates of return.  When interest rates are low and there is uncertainty in the economy, gold is often seen as a popular choice.  It beats interest from savings accounts and bonds, and offers provides, steady returns.

When the value of the dollar decreases, gold’s value increases.

 

Gold price rises in action

At the time of writing (June 2019) gold prices are on the up.  The highest they have been since 2013.  The global price of gold bullion has jumped 10% in a 4 week period.  The prompt for this was the possibility that the US federal reserve may cut interest rates in July 2019.

In general there has been a lot of uncertainty in the world that lead to this point.  A US-China trade war, tensions in the middle east, Brexit and so on.

And this is what history shows us.  In times of uncertainty, gold prices rise.

 

Gold price drops in action

In the third quarter of 2018, gold prices were on a decline, in part due to the suggestion that the US dollar was strengthening.  This turned investors to other assets.

The U.S. dollar is the benchmark for the price of gold globally.

As much of the world’s gold is denominated in US Dollars, when the dollar increases in value, this makes it more expensive for foreign buyers; meaning less gold is traded.

 

How much more could I get?

Unless you’re selling large quantities of gold, any extra you may get from holding out longer may be negligible.

Let’s imagine you have $500 worth of gold to sell.  If you waited for a 3% increase in the price of gold, you would get $15 extra.  And that 3% increase may well take a long time to come.

Of course, the longer you wait, the price can too decrease. But on the whole, if you need to sell gold because you need the money, there is no wrong time.