When is the best time to sell your Gold or Silver? It’s a question I get a lot and one that is rarely discussed amongst mainstream gold & silver personalities.
My guess as to why the topic is so carefully avoided is because so many people in the gold & silver stacker community are staunchly against selling their metals unless it’s for some imagined price that is often 10 or even 100 times the current spot price. For that reason, most YouTubers avoid the topic out of fear their core viewer base will turn on them.
Luckily, I have never let fear be a big motivator in my life because I look at things through the lens of opportunity. Yes, talking about selling silver & gold is a hard topic. It is one that shouldn’t be approached emotionally or on a “gut feeling” because that’s when the worst financial decisions are made. So, if other YouTubers don’t feel confident enough to talk about when to sell gold & silver, that is an opportunity for me to present my methodology for determining when to sell gold & silver to a wider audience.
More on how to avoid making emotional decisions when investing here:
https://www.rbcwealthmanagement.com/en-us/insights/three-ways-to-avoid-making-emotionally-charged-financial-decisions
First Figure Out If The Reason You Want To Sell Makes Sense
The first stage in identifying the best time to sell your gold & silver is recognizing your reasons & motivations to sell. Remember, your gold & silver are tools to protect the value of your labor against the evils of inflation and the risk of financial crisis (which can lead to the instability of the fiat money system).
If they have served their purpose and have met your criteria for sale, there is no shame in selling a portion of or all your gold & silver (depending on your personal circumstances).
So, what reasons & motivations do I think are the best to trigger a sale of gold & silver?
- Retirement planning / supplementing retirement income.
- Conversion to another asset / opportunity in another investment (usually selling only a portion of your position in favor another hard asset).
- Covering unplanned expenses / emergencies (ones that cannot be fully covered by fiat savings).
- When exposure to precious metals becomes too large (this can happen due to a run up in the price of metals or overenthusiastic purchasing by newer stackers).
- Paying off debts (can include tax bills).
More on planning retirement with gold & silver here:
https://youtu.be/BEWTK3sXsu4
Bad Reasons For Selling Gold & Silver
If you’ve read through the list above and couldn’t find your reason or motivation for wanting to sell your precious metals, consider this list of what I think are “bad” reasons to sell your gold & silver:
- Panic or reaction to short-term price fluctuations (gold & silver are long-term insurance policies that reward patient people).
- Pay for a vacation or other non-essential expenditure (vacations & new cars can wait – financial security & protection are more important).
- Short-term capital gains (physical gold & silver are not great for short-term trading because premiums make them less attractive vs. paper-assets).
- To go all-in on a “sure thing” / greed (gold & silver are an insurance policy if all else fails – “sure things” often fail – sacrificing a pillar of financial security for reasons driven by greed can get you into big trouble).
A quote attributed to Scotty Bowman but likely a Robert Burns Quote
Timing Your Gold & Silver Sale With DCA
So, if your motivations are right and you’re not under any pressure to sell your metals to cover emergency expenses, what is the best way to time a gold & silver sale?
For those people whose motivation to sell is to supplement their retirement income, I think the best way to do it is by using DCA (dollar cost averaging). DCA is a strategy that usually applies to buying an asset over a specific period to reduce your exposure to unfavorable fluctuations in the market. This effectively means that you end up buying the average price over time instead of getting too much exposure at a market high.
More on DCA strategy from Investopedia here:
https://www.investopedia.com/terms/d/dollarcostaveraging.asp
The DCA strategy can apply to selling assets too! For a retiree who wants to supplement their income with metals, choosing to sell a small amount each month to cover necessary expenses is probably the best way to approach it.
To get the most out of your metals, I would consider favoring gold sales when the GSR (gold to silver ratio) is above 75 - meaning 1 ounce of gold is equal or greater to the price of 75 ounces of silver. On the other side of that, I would consider favoring silver sales when the GSR is below 65. This is a good directional approach while remembering to maintain long-term balance in your metals stack (especially all my silver fans out there who sometimes forget gold exists – you know who you are).
More GSR data (including the chart above) here:
https://www.macrotrends.net/1441/gold-to-silver-ratio#google_vignette
Timing Your Gold & Silver Sales With Seasonality
If that approach is too boring for you, and you’re looking for opportunities to maximize your returns on gold & silver during the year (in real purchasing power), you may want to consider the seasonality of gold price development.
As you can see in the image below, the price of gold has historically performed better in some months than others (September being the best and March being the worst). Although this is simply a long-term trend and not a rule that we see repeating every year, it may be useful for those of you with longer time horizons to take advantage of when you see price developing in line with the trend. Just remember, trying to time your sales around historical price performance comes with more risk than a regular DCA strategy – so choose your approach wisely!
More LBMA data available here:
https://www.lbma.org.uk/prices-and-data/precious-metal-prices#/
Timing Your Gold & Silver Sales Via Market Analysis / Comparison
For those of you who are using gold & silver as a savings account with the intention of (partially) cashing it one day, timing is going to be the ultimate factor when deciding to sell. For this reason, I created a tool to monitor metals prices relative to my preferred destination asset, real estate. The purpose of the tool is to compare the combined gold & silver price vs. median US home price to identify market conditions last seen between 2010 & 2012 (I have provided 2000 to 2020 data output from the tool below as a reference and also have tools that measure this vs. the stock market).
For access to this tool, join my Patreon here:
https://www.patreon.com/user?u=85209064
Why is it so important to benchmark conditions vs. the 2010-2012 period?
I closely monitor the market for a repeat of those conditions because that is when gold & silver reached their highest value relative to other assets in the 21st century.
For those of you unfamiliar with what happened, in the aftermath of the 2008 global financial crisis there was turmoil in the debt market. The global economy exposed itself as overleveraged. Instead of happily lending out cash for a return, people ran to gold & silver for safety. As issues surrounding bad debt grew to include sovereign European nations in 2009 & 2010 (Greece, Ireland, Portugal, Cyprus), what had been a growing interest in buying gold & silver evolved into a frenzy. As housing prices bottomed out in 2011 & 2012 (because borrowing money became difficult), gold & silver reached nominal all-time highs of nearly $2000 & $50 per troy ounce respectively. Some of you may remember that and may also regret not seizing the opportunity to sell – that is why I created the tool above!
More on what happened to the price of gold following the great recession here:
https://www.bls.gov/opub/btn/volume-2/pdf/gold-prices-during-and-after-the-great-recession.pdf
Why Sell Gold & Silver For Real Estate?
As I’ve stated in numerous YouTube videos, real estate is the bulk of my portfolio / net worth. With the passive income I generate from my rental property portfolio, I purchase gold & silver on a schedule while benefiting from the long-term appreciation in value of the real estate. My strategy has nothing to do with favoring one asset over another. It’s about using the assets correctly as they were intended to be used.
Selling gold & silver for any valid reason doesn’t mean you don’t have conviction or that you’re not a "real stacker". That’s silly! Identifying the right moment to cash in your insurance policy makes you smart. For that reason, the next time the market reaches a point of imbalance where I can use my passive income earnings (saved in gold & silver) to increase my future earnings as well as my future gold & silver savings, I will be ready!
Final Thoughts
Does that mean that I will totally sell out of my physical gold & silver position once that opportunity comes? No, it does not! I recognize that anything can happen in a crash – even something as big as fiat currencies losing their value due to hyperinflation. That’s why I think it’s important to always have some gold & silver on hand, but it doesn’t mean I can’t use my excess gold & silver the way they’ve been used for more than 2000 years – as real money!!
