Is now a good time to buy gold 14 APR 2025

Should I buy Gold or Wait?

Gold has never been higher. The chart has shown massive gains in the last five years. If you had purchased £100 worth of Gold at one of its lower points years ago, it would probably have gained around 160% - now, £260. Importantly, if we assumed a 5% inflation rate, that £100 would now be worth around £78. To buy the same amount of Gold today you would now need £331 in today's money if inflated over five years without the value of Gold increasing.

Gold Price Chart

The immediate lesson - get in early. The pessimists view - don't buy Gold today.

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Users can join our platform for free. Those into more advanced trading can access our API providing far more data then dashboard reports show also.

We have plans to create additional reports around commodities cryptocurrencies and FX rates.

Disclaimer on this article

We make no attempts to delve into the questions around custody (where you hold your gold) or the wider question around the uncertainty of financial markets
We do mention ISAs and tax implications But always seek independent financial advice and do your own research
Where you live may significantly change how you decided to acquire gold

None of this is financial advice, but please read on.

Gold as a liquid and iliquid asset

To professional investors, gold is a liquid asset - traders can buy and sell gold with ease. To retail investors buying Gold their choice is limited to simply buying Gold and hoping it goes up in value. Retail investors (probably you) will buy Gold, store it under their mattress and wait for it to go to new amazing heights and then sell it. Professional investors are trading continuously with set strategies comprising of buying and selling gold to achieve returns - cashflow and acquire more gold. The markets are not binary though - one person or company cannot own all the gold.

The immediate lesson - most retail investors are not trading gold, they buy it and hold it in the hope it goes up when they need to sell it.

"An ounce of gold 100 years ago will buy you the same well-tailored suit today as back then"

Gold maintains your purchasing power.

So has gold actually made profits in the last six years?

Short answer - yes. A well-tailored suit does not cost 160% more. Gold taps into fear and uncertainty. There will be periods where gold outshines other assets and the inverse.

Should I buy gold right now?

No. The reasons may surprise you - don't be disappointed as there is a strategy for accumulating gold.

Reasons for not buying gold

Gold could drop significantly in value
You could buy at the high and see the price fall to return (not the same as the first)
Gold could increase in value after you bought it, but it could also fall significantly later - you won't sell at the right time
Your government may do precisely what the US government did in 1933 if it goes higher - ask their citizens to hand over their gold or face 10 years in jail
Governments find new ways to tax people constantly - decades of prudence can be eviscerated in one act of legislation
When the price goes higher, the market becomes less liquid and harder to sell

Note - we are avoiding the concept of physical versus paper gold.

A lesson from cryptocurrency and property (Real Estate)

Quite a tough combination to blend but here goes - an adage in Great Britain states "Property increases three-fold every 21 years if you time it right."

"Bitcoin is the fastest growing asset in history - it is only going higher!"

Bitcoin is the time compressed market

The US Dollar had a 4% drop last week - Bitcoin can do 15% in a matter of minutes, often days, sometimes months. As a buyer and seller of Bitcoin, one gets to experience the highs and lows of property and gold far quicker.

Some describe time not in terms of regular set periods in succession but instead the amount of activities occurring. Time is now moving faster than ever before. In the same light, Bitcoin is the analogy of Gold and we can learn as much about the movement of less volatile assets as we can from Bitcoin in a shorter space of time.

Vital - timing is everything and buying significant amounts of an asset can be disastrous if the price falls.

If you want to own gold, you must repeatedly buy and sell it at the right time to accumulate more

A hard thing to appreciate is the idea of putting a large amounts of cash into an asset and hoping it will increase in value. Frustratingly seeing an asset you thought about buying has increased significantly over a number of months or years can dissuade most from entering into that market.

Another challenge is the over expectation on an asset to increase significantly overtime. This is due to the very probable outcomes that can occur;

One could be very early in the gold bull cycle, perhaps we need to discount the history of the price and simply look to the prevailing market uncertainty to assume that gold will continue to go to higher highs
We could assume that gold has valid significantly due to many market uncertainties such as the pandemic and trade tariffs via the Trump regime
Alternatively, one could determine the price could stay flat

A brief explanation on dollar cost averaging and why we don't think it is a good strategy for accumulating assets

We have discussed dollar cost averaging (DCA) in other articles. The idea behind dollar cost averaging is to regularly buy an asset with smaller amounts of money. By buying in smaller quantities you potentially avoid fine all of the assets at the higher price and potentially, mainly by good luck, buy the asset at cheaper prices then today's price.

The big issue we never see covered on financial social media and financial investment websites is the problem that you will have allocated a large amount to that asset. A hypothetical example, if we purchased £1000 of gold every month we would end up having spent £12,000 for that gold. If, of course that goal doubled in value we would fill very pleased with ourselves. The question being, how would we feel is the price of gold halved?

This problem is not unique to gold, the same can happen with pensions and houses.

Swing trading to the rescue

Swing trading is a mechanism traders years to buy and sell an asset at the highs and lows of a channel. This may be confusing but think of it in terms of the price of gold going up 10% this week falling 10% next week rising 10% the week after and falling 10% the week after that. If you identified this channel, some could say you would need a crystal ball to see this trend, you would buy at the low point at 10% and so at the high point at 10% repeating this over time.

We asked ChatGPT to take this example fictionally and derive the potential profits over six weeks and for a £100 stake you could say a £33 gain.

We also ChatGPT to extrapolate this over six months and suddenly we're talking of a 293% gain - £339.30.

Now of course, this example is completely fictional and this type of compounding would be extremely hard to pull off on an asset such as gold.

Which is where cryptocurrency comes in

Cryptocurrency has much more volatility than gold.

A combined trading strategy

Cryptocurrency and gold

Bitcoin USD Price Chart

We have included a chart of Bitcoin. Immediately standing out is the much wilder swings in the price of Bitcoin - the volatility. If we can apply a swing trading strategy to Bitcoin we could take some profits and buy gold with them. The advantage of this strategy is to acquire some gold without using cash directly I'm keeping some capital in what is termed to be a more risk-off asset - gold.

Silver and gold trading strategy

Silver Price Chart

Here is a chart of wisdom tree metal securities physical silver, this is listed on the London Stock Exchange. We can see quite significant swings in the price of silver which meets the criteria of price volatility. In just the last year we have seen many swings over 10%. Silver can be purchased inside an ISA wrapper.

There is course downside risk with silver but it is reasonable to presume it will not have as much downside risk as Bitcoin or other cryptocurrencies.

The point here, we could legitimately avoid cryptocurrency altogether and focus purely on precious metals if we were not as keen on getting into cryptocurrency.

Advantages and disadvantages of trading cryptocurrency versus precious metals as at 2025

The major disadvantage of trading cryptocurrency is that profits are subject to capital gains. We cannot advise on taxation issues but from our latest research - capital gains on buying silver for a profit is not a taxable event.

A disadvantage of trading with the noises is most ISA providers charge more money per trade. This tends to mean you need to factor a larger amount of profitability into the trade.

Being in the game as opposed to out of the market

One of the hardest challenges to entering a market is the fear but the price will drop significantly. Many have an inbuilt resentment to buying an asset that is significantly higher than most other people have paid for it. Yet we do this on a daily basis when we go shopping. We may lament that the price of oranges is far higher than what we paid two years ago and yet we still buy oranges.

Conclusions to acquiring gold

When buying gold, indeed any assets that has increased in value significantly, one can be over-eager to buy based upon the euphoria, and one can become petrified into not buying any because the price looks like it could fall significantly.

The trading strategy that we personally undertake is to try and not pay full price for the asset. By swing trading between assets, you have the chance to accumulate more and with any profits minus tax and fees - buy your desired asset longer time frames.

Don't forget to join our platform and keep coming back, thank you.

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