Gold and silver bullion when held in the safest way possible (fully segregated and allocated storage) are hedges and safe haven assets. Their purpose is insurance, wealth preservation and to protect and grow wealth. Many buyers have no intention of ever selling as they see it as a way to pass on wealth to the next generation and vital insurance in an uncertain world.
With precious metals, you have the ability to sell small amounts of your holding whenever you want meaning that you can take profits on some of your precious metals holdings after strong gains or indeed liquidate some of your precious metals when you need your cash. This is in marked contrast with property which is not divisible and much less liquid.
Gold and silver bullion coins and bars are some of the most liquid and universally accepted assets in the world. This is especially the case during a crisis or financial emergency when they are an excellent source of cash or digital currency.
In the event of no crisis, you may wish to sell your precious metals if they have become expensive relative to other assets and you see opportunities in other assets. Alternatively, you may simply wish to sell some in order to pay for education, health care or other needs of your family.
For investors, there may be a time when you wish to lower your exposure to precious metals and thereby rebalance your overall portfolio. Should the gold or silver price appreciate significantly you have the ability to lock in a profit on your investment. To do so, you need to consider when you plan to sell your gold and silver and ensure that you get the best possible price.
Buy Low and Sell High?
Most investors aim to buy low and sell high; this mantra underlies not just stocks and bonds but almost every other traded commodity and asset. After all, that’s how you make a profit, right? It is therefore important that investors in and buyers of precious metals consider when should they sell their gold and silver?
Timing your entry into or exit out of any market can be extremely profitable. However, as history has proven time and again, this is usually a fool’s errand. Any seasoned investor will point out that focusing on the fundamentals of any market will consistently deliver excellent returns. There is never a perfect time to sell gold or silver in the same way, that there is never a perfect time to buy.
Therefore, gradually buying and dollar, euro and pound cost averaging into a market is prudent. Similarly, it makes sense when the time comes and your need to, to gradually sell your precious metals holdings.
Gold and silver, unlike other paper-denominated currencies, have inherent value that is not pegged to any other asset nor dependent on government policy. For this reason, these two valuable metals should be included in every portfolio as financial insurance and a store of wealth. When it comes to deciding when to sell, this unique quality should be considered when making your decision to lower allocations to gold and silver.
Have Core Gold & Silver Holding and Do Not Sell Today
When you buy any form of insurance, you expect it to cover your assets, health or life for as long as possible. Gold and silver bullion are your financial insurance; they should form roughly 10% of your entire portfolio, so you rely on the other 90% in stocks, bonds, and property to make the gains for you. Your precious metals holding are there to protect your wealth if economic or geopolitical uncertainty leads to financial crashes and economic depressions.
However, as we have seen before, gold and silver have considerable potential to deliver strong returns and profits for investors. Therefore, there will come a time when you may feel it is time to lower your exposure to the precious metals market, take profits and rebalance your portfolio.
Before we look at instances where you should sell your gold and silver, lets first consider why it's unwise to sell gold today:
- There is a looming financial and economic crisis. Most assets including stocks and property are overpriced, making it likely that there will be a massive correction. You should increase your gold and silver holdings, and not cash in for these obvious reasons.
- Monetary policies look set to ease again in the U.S. and globally: The Federal Reserve, the ECB and other central banks look set to lower interest rates and revert to QE
- Emerging markets such as China, Russia and South Korea are stockpiling gold as a monetary reserve and this very significant extra demand should lead to further price gains.
- Real interest rates are negative: This is the difference between the current interest rates and inflation, and when negative, the dollar and other currencies lose value.
- The dollar and other major fiat currencies will face pressure from inflation as public debt, pensions and trade deficits are massively large and completely unsustainable.
Taking Golden Profits and When To Reduce Allocations
One of the reasons for buying gold and silver is speculation; you expect their value to go up and therefore take a position in the hope of selling once the price goes up. For investors who bought gold when the cost was much lower, selling a part of your holdings to reap a decent profit is advisable.
However, please note that you should never sell ALL your physical gold and silver. This is because you would be exposed and lack critical financial insurance if the economy and markets take a turn for the worse. Gold and silver should ideally be a permanent component of your portfolio as insurance against tough times and you should always keep a core holding.
Aside from speculative goals, there are other instances when lowering the value of your exposure to the gold market makes sense:
You need cash quickly: When a crisis hits, physical gold and silver owned in the safest ways (fully segregated in the safest vaults in the world) will be the best and quickest way to raise much-needed funds. In fact, in a severe emergency such as war, when the markets and banks may be close, inaccessible and illiquid, gold and silver will be one of primary forms of money in order to get currency. This is the main reason why you invest in precious metals in the first place.
There is a gold and silver bubble: When there is over speculation in the gold market, the price may rise significantly in disregard of underlying market fundamentals. During times like these, silver or gold will may become massively overvalued. You may then sell part of your holdings for a lucrative profit, with the aim of reinvesting when a price correction occurs.
Gold and silver form a large percentage of your portfolio: If the gold price raises significantly, or if you increased your allocation in expectation of a crisis, gold will form a much larger slice of your entire portfolio. In this case, you may sell part of your holdings to rebalance your portfolio.
Whatever your reasons for selling gold and silver, it's important to remember that this decision goes way beyond your immediate plans for the money. As with every asset, selling is a big decision that should be carefully considered with a view on the long-term impact on your wealth and finances.
Work with an Established and Trusted Gold Provider
Finally, when you decide its time to sell, use a reputable and established gold dealer with excellent liquidity and competitive pricing. GoldCore consistently makes a market in all popular coins and bars at very competitive prices from the safest vaults, in the safest jurisdictions in the world.
To sell your gold bullion coins or bars discreetly, conveniently and at competitive prices, click here for more information.
How to Sell Physical Coins and Bars from GoldCore Secure Storage?
Physical gold and silver bullion currently being stored on your behalf in Goldcore Secure Storage is the easiest form of bullion to sell. This applies to existing clients who have bought gold and silver coins or bars from GoldCore and opted to have them stored fully allocated and fully segregated in any of our partner vaults around the world. GoldCore will always buy back gold and silver bullion sold to its clients and stored within GoldCore Secure Storage.