SUMMARY :
1) Factors influencing the price of gold
Gold is first and foremost a precious metal that has served political, economic and religious purposes over the centuries. In modern society, and even more so since the 20th century, gold is a financial asset in its own right.
The legal price of gold changes every day, impacting not only the value of an ounce of gold, but also the value of intangible gold, i.e. via ETFs, certificates, derivatives, etc.
More specifically, this variation in the price of gold is influenced by various economic, political and financial factors. It is important to understand these macroeconomic issues, because they will help investors determine the right time to invest in physical gold.
Global economic context
There have been several financial and economic crises in recent decades:
- Crash of 1929,
- October 1987 crash,
- Internet bubble of 2000,
- Subprime crisis in 2007/2008,
- Eurozone sovereign debt crisis in 2011
- Covid pandemic in March 2020
- Russian invasion of Ukraine in February 2022
- Introduction of generalised customs duties by the United States in April 2025.
Generally speaking, in these extreme situations where volatility has peaked (observable on the financial markets thanks to the VIX index), gold has emerged as a safe haven for investors seeking security.
Source TRADINGVIEW
| NB: in normal conditions, the VIX is below the 20 level (yellow line). Any upward trend is a warning of market tension. Above are the main tensions over the past 20 years. |
In fact, periods of recession, currency instability and economic crisis are a source of massive capital transfers into gold, mechanically driving up its market price.
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N. B. Over the past 20 years, gold has crossed several psychological price thresholds. - 1000 dollars an ounce was tested and breached during the 2007/2008 subprime crisis. - 2000 dollars an ounce was tested and breached during the COVID pandemic of 2020. - 3000 dollars an ounce was tested and breached with the implementation of President TRUMP's tariff and customs policy in 2025. |
Interest rates and monetary policies
When central banks adopt so-called ‘accommodating’ monetary policies, this means that interest rates will be low, or even negative. This is a situation that tends to push up the price of gold.
In fact, when bond yields are low, gold becomes more attractive, as it generates no return but retains its long-term purchasing power.
2) The best times to buy gold
As mentioned above, the price of gold changes in real time as economic, financial and geopolitical events unfold. To determine an attractive buying window for this golden metal, you need to keep an eye on certain key indicators and periods:
In times of economic or financial crisis
When stock markets are highly volatile and index prices plunge, the price of gold will tend to rise, because this asset is inversely correlated with the equity markets. In effect, investors will sell their positions in risky markets (‘risk off’ mode) to reallocate their cash to a safe-haven asset like gold.
Buying just before or at the start of a crisis can therefore be a good way of seeking long-term capital gains.
When interest rates are falling
Lower interest rates make gold more attractive than bonds or traditional savings accounts. These major decisions by central banks should therefore be watched closely to take full advantage of bullish movements in gold.
At the start of a period of high inflation
If economic forecasts suggest that inflation is set to accelerate in the future, especially in Europe or the United States, this could be an attractive entry point for buying gold to take advantage of the upcoming uptrend.
Seasonality of the gold market
By analyzing historical trends, it is possible to highlight a seasonality of the gold market. Indeed, certain periods of the year offer investors valuable benchmarks to optimize their gold buying and selling strategies.
Statistically, we find that:
- January is favorable to gold, with a bullish trend observed in most years since 2001.
- From February to May, there is a certain stability in prices with moderate price changes.
- From June to August: traditionally, the summer period corresponds to a decline in gold prices due to a very low activity on the financial markets.
- From September to December: A return of buyers is usually seen in the fall with culminating in December or the demand is increased because of the end-of-year holidays and institutional purchases.
- With these historical findings, investors can make the choice to plan their gold purchases or sales.
- To initiate a purchase, one can prefer a period with an historically low price to benefit from more advantageous prices.
- To sell your gold, it is better to target periods of high demand, especially at the end of the year, to maximize earnings.
NB: seasonality is only a theoretical concept that demonstrates a certain recurrence in time. However, global economic conditions, interest rates, inflation and geopolitical events could disrupt this established order.
3) Buying strategies
While there is no magic formula or martingale for buying low and selling high, there are various strategies that can help you make the right decisions.
As always, these strategies depend on the investor's risk profile, financial needs and investment horizon (short, medium or long term).
Buying in anticipation of economic cycles
In this case, the investor will have a fairly ‘macroeconomic’ view of events. The aim is to buy gold when major economic signals emerge. This can happen in the event of an economic crisis, a recession, a change in central bank monetary policy, high volatility, etc.
This approach is not the easiest, because it requires a good knowledge of the economic and financial environment, as well as keeping abreast of gold news and price trends, etc.
Technical analysis
Technical analysis is used to determine the best entry points by monitoring support and resistance levels of gold prices.
This approach is particularly difficult because, in addition to taking into account the macroeconomic environment, it requires solid expertise and regular analysis of gold price charts to capture movements.
Progressive investment or smoothing (DCA)
Very fashionable approach in recent years, this strategy aims to make progressive investment by buying gold regularly over a given period, regardless of the price of gold.
Over time, this smoothes the effects of fluctuations and market “noise”, thus reducing the risk of buying at the wrong time.
This rather «passive» concept of investment can have virtues in the long term, but you still need to start this DCA with a relatively low gold price. The initial timing is essential, because initiating purchases on high points (historical record type) can be very dangerous.
Indeed, in the event of a fall in the price of gold (end of an upward long-term trend), the “downward averaging” that will then be carried out by the DCA is by no means the assurance of generating a gain in value over the long term. At worst, a significant loss of money, at best a cost price that could take years to become positive again.
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