When should you buy gold?

What events can affect gold prices?

Gold prices are influenced by several key factors that you should be aware of before making a purchase. We’ve listed some common influences that impact gold pricing below.

Inflation: Inflation is when prices for goods and services go up over time, making money worth less. When inflation is high, many people buy gold because it tends to hold its value better than cash. This increase in demand often causes gold prices to rise. So, during times of high inflation, gold can be a practical place to store your money.

Interest rates: Interest rates, set by central banks, can also impact gold prices. There’s usually an inverse relationship between interest rates and gold prices. When interest rates are high, people can earn more from savings and bonds, so they might not want to buy gold, leading to lower gold prices. On the other hand, when interest rates are low; gold becomes more attractive, which can drive prices up.

Geopolitical events: Political instability, conflicts, and recessions can create economic uncertainty and extra volatility in financial markets. During such times, investors often turn to gold because it’s seen as a “safe haven” asset. This increased demand for gold can cause prices to spike during these events.

Currency fluctuations: Gold is typically priced in US dollars. When the value of the dollar drops, gold becomes cheaper for people using other currencies. This can lead to more people buying gold, which pushes up its price. Conversely, a strong dollar can make gold more expensive for foreign buyers, leading to lower demand and lower prices.

Market speculation: Sometimes, investors buy or sell gold based on what they think will happen in the future. If many investors believe that gold prices will go up, they may start buying gold now, which can drive prices higher. This is called market speculation.

The best times to buy gold

Knowing when to buy gold can help you make informed decisions. Here are some guidelines to consider:

During economic uncertainty: Gold prices tend to rise when the economy is uncertain or going through a recession. If you believe that the economy is going to struggle, it might be a good time to start owning gold. Many people buy gold during these times to protect their wealth.

After interest rate announcements: Central banks, like the Federal Reserve, often announce changes to interest rates. If they lower rates or keep them low, gold prices can rise. Paying attention to these announcements can help you decide when to buy.

Seasonal trends: Gold prices often show patterns throughout the year. Historically, prices tend to rise in the first few months of the year. This is partly due to increased demand from investors and jewellers. Buying gold early in the year could be a smart move.

Buying gold in Dubai: Dubai is known for its competitive gold prices, thanks to low taxes and a strong gold market. If you’re in Dubai or can buy gold there, it might offer you a better deal compared to other places.

Benefits of buying gold regularly

Instead of trying to time the market perfectly, another strategy is to buy gold regularly, no matter the price. This approach is known as cost averaging.

Reducing risk: By buying a fixed amount of gold regularly, you could buy more gold when prices are low and less when they’re high. This helps to spread out the risk of buying at a bad time and reduces the impact of price swings.

Building wealth over time: Over the long term, gold tends to increase in value. Regularly buying gold can help you build wealth steadily, even if the market has ups and downs. Small, consistent purchases can grow significantly over time.

Less stress: Buying gold regularly means you don’t have to worry about picking the perfect time to make a purchase. It reduces the pressure of trying to predict the market and allows you to focus on building your portfolio gradually.

Buying gold regularly is easier than ever through our app, with cost averaging on live prices, making it simple to invest steadily over time. Open a free account to get started.

Analysing gold price charts

For those interested in more advanced strategies, technical analysis can help you decide when to buy gold. This method involves looking at charts and historical price patterns to predict future movements.

Support and resistance levels: Support levels are where the price of gold usually stops falling, and resistance levels are where prices typically stop rising. Buying gold at support levels can be a good strategy because prices may start to increase after hitting these levels.

Moving averages: Moving averages show the average price of gold over a specific period, like 50 or 200 days. When the short-term average crosses above the long-term average, it might signal a good time to buy.

RSI (Relative Strength Index): The RSI measures how quickly and how much prices are changing. If the RSI is below 30, it might mean gold is oversold, suggesting it could be a good time to buy.

Gold is a safe-haven asset, especially during uncertain times or when inflation is high. By understanding the factors that affect gold prices and using strategies like regular buying or technical analysis, you can make informed decisions about when to buy gold. Whether you’re purchasing gold in Dubai or watching global trends, timing your moves is critical.