Tip 5/7: Timing your purchase is crucial – Never chase prices higher

Tips to increase your wealth by investing in Gold & Silver

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Tip 5: Timing your purchase is critical. You should never chase prices  higher.

Are you ready to buy gold or silver? Very good, one of the key things to do, is determine when you will do your purchase. You can get help from the long term gold price and silver price. The “golden” rule is to buy the dips (they always come) and avoid buying the peaks.

Gold price and silver price chart

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Have a look at the gold price chart for the past 10 years. The move up is so perfect and it stays within a range of higher highs and higher lows. Don’t chase prices higher; just wait to buy the dips. Don’t be afraid of waiting a bit if prices are near an intermediate peak. You should welcome decreasing prices for the buying opportunity you get.

Ideally you accumulate physical gold and silver in your core holding over time. It means you buy more every time prices fall to intermediate lows. You should not touch this core holding. This principle applies not only to individuals and households, but also to private and professional investors.

Gold silver ratio

If you are looking for help in determining whether to buy gold versus silver, than you should carefully consider the gold/silver price ratio. In general, gold and silver follow the same pattern up or down, but they still have their own dynamics. In April of 2011, the silver price peaked while gold did so only in September (that’s more than 4 months later). The gold/silver ratio is a reliable indicator to estimate which of the two metals is expected to move the sharpest up or down.

Historically the gold/silver ratio has been on average 16/1. During the past decade (2001 till 2010) both gold and silver performed very well in nominal terms. When looking at the gold/silver ratio, most precious metals experts will tell you that the silver price is about to increase sharper than gold during the current decade (from 2011 onwards).

Higher profits with technical analysis

If you are willing to make even higher profits, then set up a separate portfolio of gold and silver assets, which you sell when prices are overbought and buy again when prices are oversold. You can do it by buying gold and silver with online services, gold and silver backed ETF’s, physical bars or mining stocks. If you need professional assistance, then consider the services within the recommended newsletters section. We have subscribed to all of these newsletters; the selection is based on years of research and it contains only the best in class services.