Which is the Right Time to Exit Gold

January 30 , 2013

We have arrived at a time of very high gold prices. Gold prices are definitely supposed to stay above inflation levels at all times but what we are witnessing now is definitely much more than that. The current rally began in 2008 with the start of global economic turmoil and has not yet lost steam in late 2012. However timing the markets for selling or buying gold for investments does not make sense. Simply because we can only make guesses from current situations and future expectations but ultimately nobody can accurately say whether the market would not rise higher than where it is now or if it would decline.

Rather it is best to keep accumulating gold in small quantities through gold mutual funds or gold ETFs, just like you regularly invest in debt products or equities, and keep holding it for a long period. If you accumulate gold in this way you can sell your gold holdings whenever you require money. Avoid speculating on gold price.

If the weight of gold in your investment portfolio exceeds about 15% of the total weight of the portfolio you can sell it now. When everybody on the street is talking about gold and is rushing to buy, you know that it is the best time to strip off the excess gold you possess. Price of gold tends to peak around Dhanteras and Akshaya Tritiya festivals. If you own excess physical gold get it valued by a government valuer and sell it to a jeweler who gives this rate around the festival times. If you hold excess gold units in ETFs or mutual funds you can sell these too around those times. Hold the remaining gold until the time you need cash.

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