July 2008 - The best time to buy gold?

Posted On Thursday, Jul 10, 2008

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International gold prices have risen by 11% for the six month period ended June 30, 2008. During the same period gold prices in india have risen by 21.2% on account of the depreciating Rupee.

The big question is whether gold prices will rise or fall over the next six months? or what will be the price of gold at the end of the year? That is anybody’s guess today. Historical data may provide some indication on the likely direction of gold prices.

International gold price trends during each of the calendar years starting from 2002 are given below. Returns shown in the graph below, are the absolute returns on gold till the end of the calendar year, assuming purchase at the average price of gold between June and July of that year.



July 2008 - The best time to buy goldJuly 2008 - The best time to buy gold
  
July 2008 - The best time to buy goldJuly 2008 - The best time to buy gold
  
July 2008 - The best time to buy goldJuly 2008 - The best time to buy gold
Source for all charts: Bloomberg.
Past performance of gold may or may not be
sustained in the future.;
 
July 2008 - The best time to buy gold

From the above data it is apparent that investors who invested near the average prices of gold between June and July of the last 5 calendar years, would have got positive returns on their investment within the same calendar year.

What returns investors will get upto the end of 2008 by investing in gold today is not known. However, historical data suggests that the returns on gold during these periods have been positive with the least being 3.6% and the maximum has been 26.23%. The average returns have been 14.81%. On an annualized basis these figures would exactly be double of what they are shown above.

So going by historical trends, if you are looking to buy gold in this year, then this period (June - July) could be be the best time to buy gold.

Buy Gold now... Buy Quantum Gold Fund (ETF).



Above article is authored by Quantum.

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