The best times to buy gold bars and coins

The economy in 2023 has been uneven. From persistent inflation and a long string of rate hikes to bank failures to talks of recession, investors are understandably worried about protecting their money. In times like this, security and stability are the name of the game. One asset investors often turn to for this is gold.

Gold has been considered a valuable investment for centuries for a number of reasons. It typically maintains its value over time, even during economic downturns, making it an excellent store of value. It moves independently of other assets, which can help diversify your portfolio and balance risk. It's also always in demand and easy to sell, especially if you choose to invest by buying gold bars and coins. And there are many top gold companies that can help you get started.

While physical gold is a smart investment at any time, there are some times it's particularly prudent to purchase. Knowing when to buy gold can also help you maximize your investing dollars and get the most out of owning this precious metal.

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The best times to buy gold bars and coins

Consider investing in gold bars and coins in the following situations.

When gold prices are low

Gold prices aren't as volatile as other assets, such as stocks. But they do move up and down over time based on factors like geopolitical events and supply and demand.

If you're patient and keep an eye on the market, you may be able to buy gold at a discounted price, getting more for your money and potentially turning a higher profit when you decide to sell your bars and coins.

When inflation is high

One of gold's best-known uses is as a hedge against inflation. When the value of the dollar drops, investors turn to gold as a means of preserving their wealth.

That's because, unlike paper currency, which can be devalued by things like overproduction, there is only so much gold in the world. Plus, gold is used in many products, from jewelry to electronics. As a result, it tends to hold its value despite rising inflation.

Take the 1970s, for instance. During this decade, interest rates ballooned from an average of 5.84% to an average of 13.58%, according to the Federal Reserve Bank of St. Louis. Meanwhile, gold prices skyrocketed from $35 per share to $850 per share, according to NASDAQ data.

If you're worried about your portfolio losing value to inflation, gold bars and coins can help you keep your money safe. You may even be able to buy gold bars at Costco now.

When the economy is uncertain

Another good time to buy gold bars and coins is when the economy is in turmoil. Gold has long been considered a safe-haven investment that weathers well in market turbulence. When the economic news is worrisome, more investors seek out gold's stability, and this increased demand drives up prices. So, if you feel uneasy about the state of the economy, investing in gold bars and coins can give you some much-needed peace of mind.

When the stock market is down

Gold has an inverse relationship with the stock market. In other words, when the stock market is doing well, gold prices go down, and vice versa. This makes gold a great way to protect your portfolio from losses.

According to data from GoldSilver, gold prices rose during six of the eight largest stock market crashes of the past four decades. For example, the S&P 500 fell by an astonishing 56.8% during the 2007 to 2009 recession. Gold prices, meanwhile, rose by 25.5%.

If you want to mitigate the risk that comes with more volatile assets, gold bars and coins can be a wise way to do so.

Explore your gold investing options with this free investment guide.

The bottom line

Gold bars and coins can be a smart buy when inflation is high, the economy is shaky and the stock market is performing poorly. That said, it's important to remember that timing isn't everything when it comes to investing in gold.

Because of its ability to ride out economic storms, gold is best considered a long-term investment. You're not likely to strike it rich overnight the way you might with assets like stocks, and focusing too much on temporary price fluctuations can negate gold's biggest benefits. Instead, experts recommend keeping 5% to 10% of your investments in gold at any particular time.