Gold is a promising investment if it is done for a long time. Its price does not always increase from day to day. Its movements are always volatile in the short term. This week prices could go up, but the following week prices could continue to sag.
But for the long term, don’t worry, there is no term the price of gold goes down. If you do not believe, just try asking your mother who diligently collects gold jewelry for years. What is the difference from the price when he buys with the current conditions.
With these price fluctuations, you need to know when the right time to make a purchase and when to sell so that the amount you can get is much thicker.
Here are three recommendations for the right time to make a gold transaction to reap multiple profits:
1. When the exchange rate strengthens
One of the factors that influence the movement of gold price is the exchange rate. You have to determine the price of gold does refer to world gold and the exchange rate of money. If world gold prices fall because the dollar strengthens, then the price of gold will adjust.
According to thebalance.com, many investors buy gold to hedge against the decline of a currency, usually the U.S. dollar. As a currency falls, it creates higher prices in imports and inflation. As a result, gold is also a defense against inflation.
The decline in world gold prices will be attractive with the condition of the exchange rate in determining the price of gold.
When the exchange rate weakens, many people will compete to buy gold to pursue the potential increase if the weakening of the exchange rate continues. Usually, people who take such steps are short-term investors.
However, if your goal is a long-term investment, don’t buy gold when the exchange rate weakens. Buy it when the currency strengthens because the price of gold will be cheaper so that the potential profits that you will get much greater with loose notes.
2. Uncertainty domestic political
Gold price depends on supply and demand. If there is uncertainty in the political year, there is potential for gold to be hunted down again. The reason is, investors will avoid risk assets amid uncertainty such as for example in the presidential election years. When a lot of gold is hunted, the prices will increase automatically.
However, if domestic political conditions tend to be conducive after the presidential election, investors may return to risk assets so that the gold price will be corrected.
Well, if you want to make a lot of money in long-term investment, buy gold when political conditions go into uncertainty. But if you want to pursue a short-term approach, buy when that uncertainty begins to occur.
3. Many gold stocks
The gold price is also affected by stock in the market. The more difficult gold is mined, the price of gold on the market will rise due to the scarcity of gold stock. Especially if the demand for gold actually increases, so the miners must dig deeper.
When demand rises, the price of gold will increase, including the price of gold. If you want a long-term investment, don’t buy gold when the stock is scarce.
After learning the things above, are you ready to invest in gold?
Read more: 3 Types of Investment for Beginners
