Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Gold Prices
Gold Price
[Most Recent Quotes from www.kitco.com]
Our RSS Feed

Gold Updates by Mail

Enter your email address:

Follow Us on Twitter
« Financial Astrology: Metals Under Accumulation | Main | Randgold Resources Limited Heading Towards The Buy Zone »
Thursday
Oct252012

Buying the Dip: Finding the Best Entry Price for Gold

By the Hard Assets Alliance Team

With the Fed's announcement of QE3 and the world's central banks jumping onto Uncle Ben's helicopter, prospects for a rising gold price are rosy.

But, what if you're new to buying gold, have seen the price rise ever higher over the past few years, and are worried you've missed the best entry point?

If you share our belief that money printing and subsequent currency devaluation will continue, then you need not worry. The long-term prospects for gold are very positive - making any entry point at current levels a good one.

However, temporary dips in price can offer a golden opportunity to buy the metal at a “discount”. How can one identify these buy points? We'll explore the answer to this question below.

Buying Indicator #1: The 50-day Moving Average

One of the most useful technical buying indicators is the 50-day moving average. Once gold's price drops below the line, it often experiences a surge soon after, and, other than in a temporary sideways market, rarely returns to that original price point again. Some such opportunities are highlighted in the chart below.

One may ask why gold hasn’t made new highs in the past year. Looking back at the chart, we see that after the end of QE2, gold has traded sideways. However, dips below the 50-day average still represented opportunities to acquire more of the yellow metal. Now that we’ve got another round of quantitative easing, we expect gold to resume the pattern of temporarily dropping below the 50-day average and then breaking out to new highs afterward.

Buying Indicator #2: USD Index

Another indicator that gold is “on sale” is the USD Index. Gold and the USD Index have a strong inverse relationship, meaning that tops in the index represent a good time to buy gold. In this next chart, we’ve circled the tops in the USD Index and marked the subsequent rises in gold prices shortly thereafter.

More Gold Buying Tips:

Don’t get hung up on price fluctuations.

Gold prices are volatile in the short term. Thus, you should not get too hung up on these wide fluctuations. However, if you can stomach the short-term movements, or if your ability to purchase is limited, monitoring a couple technical indicators can help identify appropriate entry points for a position in gold.

Understand why you are buying.

Buying physical gold in an attempt to make a gain on short-term price fluctuations is not recommended as costs can make this an unprofitable venture. Rather, the acquisition of this traditional store of value is a substitute for the fiat currencies around the world – it is better viewed as an ultra-secure savings account that cannot be debased or stolen through fiat money printing.

As we don’t believe gold is anywhere near it’s top, it’s a long-term investment and only to be sold if you need the cash.

Set aside a fixed number of dollars for gold purchases each month.

A very easy way to take advantage of the temporary dips in price is to set aside a fixed amount of dollars each month for gold buying. This habit, when paired with the basic indicators discussed above, give you the best opportunity to purchase gold at a favorable price.

[One of the most convenient ways to purchase and store precious metals is through a SmartMetals account – a breakthrough new program developed by the Hard Assets Alliance that allows investors to buy gold, silver, platinum and palladium through a secure online portal and store domestically or, in the case of gold, internationally in London, Zurich or Melbourne. Download the free SmartMetals Action Kit for all the details.]

Regarding www.skoptionstrading.com. We are pleased to inform you that we have now achieved more than a 500% return since inception.

If you wish to join a winning team then please become a subscriber via this link:

Our model portfolio is up 505.98% since inception

Our trading success rate is 91.30%

95 profitable trades out of 104.

An annualized return of 78.31%

An average return of 35.55% per trade

Our annual performance figures are as follows:

2009 We made a profit of 23.89%

2010 We made a profit of 158.66%

2011 We made a profit of 40.95%

In 2011 we outperformed:

S&P by 42%

HUI by 53%

Gold by 31%

Silver by 41%

The 2011 Annual Report by be accessed via this link.

Also many thanks to those of you who have already joined us and for the very kind words that you sent us regarding the service so far, we hope that we can continue to put a smile on your faces.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. Winners of the GoldDrivers Stock Picking Competition 2007  

If you are new to investment in the precious metals sector then you may wish to subscribe of our FREE newsletters regarding gold stockssilver stocks and uranium stocks, just click on the links and enter your email address. 

Subscribe for 6 months- $499

Subscribe for 12 months- $799 

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>