Knowing when to sell your gold obviously depends on how much you want to get for it. The price of gold is obviously one of the most essential indicators to follow. Let’s try to get a clearer picture.
Selling a piece of jewelry, a coin or an ingot in a gold store, whether it is for cash or to recuperate the fruits of an investment, involves behaviors and observations that require understanding some of the constants in the variations of the gold price.
Scarcity and demand for gold.
The value is based on two elements. On the one hand, there is the scarcity of a good or product. However, scarcity is not enough to give value to a thing. It must be associated with another factor: demand.
A product that is rare but has no demand whatsoever has no value. The combination of “demand” and “scarcity” is therefore essential.
Gold: a safe haven.
In the case of gold, as well as some other precious metals, but to a lesser degree, such as silver or platinum, another element must be taken into account: its status as a safe haven.
What is a safe haven? Simply put, it is an asset that is considered stable enough to be used as an investment, even temporarily, in the event of a crisis, whether economic, security or financial.
Today, gold is 6.5 times more valuable than it was 20 years ago. In the 90’s, the euphoria linked to the beginnings of the internet had caused the value of gold to plummet. The precious yellow metal went to make a spectacular recovery, often associated with crises.
The creation of the gold-paper or ETF (for Exchange Trade Funds) was going to allow, from the years 2000 to attract the investors and the speculators. However, as its name indicates, it is not a real possession, but a purchase on paper. Nevertheless, it has led to an increase in the value of gold due to the windfall effect. This type of investment carries risks because of its virtuality. Only physical gold is totally safe and remains the only investment that is recommended for individuals and professionals.
The subprime crisis in 2008 was to propel the value of gold to levels rarely equaled, and this until now.
When to sell your gold?
The answer to this question is simple: when you need money. Waiting for the price of gold to change is purely speculative and short-sighted. If you are in possession of gold acquired 5 years ago, 15 years, 20 years, 30 years or more, you are necessarily a winner because of the value of the metal in recent years, just look at the evolution of the price of gold for 20 years, 30 years or 50 years.