Here’s a couple of follow on questions from one we posted last week. This time mainly looking at how we think gold is likely to trend over the next 6 months…
Our reader asks:
“How do you think gold is going to trend in the next 6 months?
I have been watching the gold pricing charts from Jan 2019 but it seems to be hit and miss of when is the best time to buy. I know the prices are manipulated so is it possible to predict the best time to buy?”
How Do We Think Gold is Going to Trend in the Next 6 Months?
If we knew this we’d be on a beach sipping cocktails! It really is anyone’s guess.
But a look at the NZD gold chart might help us a little bit. We can see over the past few years the trend has been steadily up (see the rising blue trendline below).
More recently, so far this year we’ve seen NZD gold consolidate above $1875. But it did make a multi-year high in February as well.
We could make a good argument that buying on any pullback that gets close to $1875 makes sense.
With the blue uptrend line sitting at about $1800 we could potentially see a pull back at some stage all the way to there too.
However with the NZ dollar weakening and potentially having further to fall we’re not so sure that will happen.
In the chart above we can also see that NZD gold is getting very close to the February high above $1950.
So if we had to guess we’d say in 6 months NZD gold is likely to be higher than where it sits today.
Buying Strategy If We Don’t Know How Gold Will Trend in the Next 6 Months
That’s one of the reasons why we recommend getting a foothold at least. Then if you want to chance your arm on a bigger pullback you can “keep some powder dry” to buy on the dip.
But of course you do risk it not happening and instead having to buy at higher prices. But this is at least better than not having bought anything and then buying the whole tranche at higher prices!
If Gold Prices are Manipulated is it Possible to Predict the Best Time to Buy?
As for manipulation, well who knows exactly when this takes place? So trying to time those movements is nigh on impossible.
But gold in particular does show some seasonality. Even here in New Zealand, history shows the second half of the year gold does better. Often making the first half of each calendar year the better time to buy.
See this post for more detail on gold seasonality: Does Gold Seasonality Affect the NZ Dollar Gold Price?
There are a number of other factors to consider in deciding when to buy gold and silver. Including:
- Along with why buying this year is often better than waiting until next year.
Check out this post for everything there is to know about when to buy gold or silver.
Hopefully that is some help to you. At the end of the day the best time to buy “insurance” is before you need it. So for most people it makes sense to at least buy some gold today.