Here is the funny thing about buying gold, particularly buying gold coins.
Most individual buyers go crazy buying coins while prices are surging upwards. Over the last several years, since the financial crisis of 2008, individuals created a massive surge in demand for gold coins.
Think about it. During normal times the media rarely talks about gold. People don’t even think about gold.
Sure, professional investors, jewellers and central banks carry on buying and selling. But regular folks don’t.
Once the media storm dies down, individual buyers stop thinking about gold and stop buying gold coins.
Here is an interesting commentary on that phenomenon I read recently.
“Muenze Oesterreich AG, the Austrian mint that makes the best-selling gold coin in Europe and Japan, said sales have fallen 80 percent this year after buyers began to regain confidence in the global economy. “We’re getting back to business as usual rather than the hectic, panic demand we’ve seen over the last couple of years,” Vienna-based Marketing Director Kerry Tattersall said late yesterday in an interview. “
“There’s no more upward surge in gold price to titillate buyers,” said Mr. Tattersall, who retires this year after more than two decades with the mint. “A lot of people feel more relaxed about the economic crisis.” For the whole of 2010, Tattersall said he expects the mint’s sales to fall to 2006 levels, without providing figures. Austria’s mint says it supplies about a fifth of the global gold-coin market and makes about half of all gold coins sold in Europe.”
As soon as the upwards surge in prices slows or falters, individual buyers stop buying.
But for the slightly smarter individual buyer, now is exactly the right time to buy.
If you believe the price of gold is still on a long-term upward trend, you should always be buying during these quiet times – between the surges and the panic buying.