Physical Gold Limited’s Daniel Fisher examines if now is the right time to buy gold.

Over the past 2 weeks we’ve seen a huge spike in buying demand as the gold price presents a fantastic buying opportunity.

Many clients felt the price was a little directionless for a number of months and have been waiting for a reason to invest in gold. The recent price fall has provided much needed impetus to gold. The fact that it has been oversold (due to panic selling) means that the price is even lower – providing the opportunity to get a lot more gold for your money now than a year or so ago. So clients who have been waiting on the sidelines have now bought as they realise the price offers good value, the environment for gold is still strong and the fact there are few decent alternatives to put your cash.

In particular, we’ve recorded

• Approx. 50% increase in enquiries
• Approx. 35% increase in sales
• Our most popular enquiry during this frenzy being Tax free coins

We’ve also seen many existing gold buyers returning to the market who bought at previously higher levels. This price fall gives them the opportunity to lower their cost price average.

We are now starting to experience physical gold shortages. In particular there are waiting times on some gold bars of up to a month, a real difficulty in obtaining mixed year Sovereigns and I anticipate waiting times to develop on the new 2013 tax free Britannias and Sovereigns – perhaps to around 203 weeks. However, clients are willing to transact now and wait for delivery as they want to secure the current price as they feel it will only go higher over the next few weeks. I would expect premiums on these coins to be unstable as possible increases reflect a lack of supply.

Clients who started pension gold paperwork a few weeks ago (before the price fall) are now able to buy the same amount of gold for their pension at a14% lower price than when they started the process!

Clearly, the gold price adjustment demonstrates its volatility so it certainly isn’t for the short term investor. However, for those looking for medium to long term security, buying in the dips makes perfect sense in attaining the best possible value.

The article Is it the right time to buy gold? was written by Dan Fisher and posted on the Physical Gold Limited blog