Gold/Silver Dollar Cost Averaging Idea

[AmericasLastHope]

As we enter the second phase of the precious metals bull market the volatility in gold and silver is substantially increasing. I'm getting to the point where I'm sick and tired of analyzing all of the technicals and waiting to buy the dips. So I was wondering if anyone could produce some charts that show the historical low points of the metals per month, so I can just plan my budget to buy on what has historically been the cheapest day each month?

In other words, I was thinking about buying at say the end of each month, or coordinating it with a comex manipulation, but I think I'd rather just look at the historical averages and buy on say January 8th, February 21st, March 12th, April 2nd, etc.

Anyone have any charts like this, or can figure out which days, on average, have been the lowest over time?

[Zippyjuan]

Picking one day (or a few days) out of the year would be tough. I would not expect any one particular date to be significantly more or less favorable than another (for one, the day of the week a particular date falls on changes every year- one year the market will be closed on that date). Seeking Alpha did try to look at the best day of the week though. They did find some variation, but it was small.


This chart from there takes a look at the average change from the previous day's close (could have been either an increase or decrease in the price so even that does not really tell you the best day to buy). Differences were just a few cents (out of the current $34 price for silver).
http://seekingalpha.com/article/241902-figuring-the-best-day-to-buy-silver
http://static.seekingalpha.com/uploads/2010/12/14/saupload_tues003_thumb1.png

They do add though,

Interestingly, Mondays had the largest average gains with an average gain of nearly $0.12. Tuesday and Wednesday had the lowest returns of $0.03 and $0.01, respectively.

Click to enlarge

The average week for the silver price had a spike higher on Monday, followed by a correction starting on Tuesday and ending Wednesday with a renewed uptrend into the weekend. On average, the best day to buy silver was Wednesday - especially after a Tuesday takedown. The best day to sell silver was late Monday. Interestingly this pattern strongly corresponds to the COT report release cycle.



I would suggest sticking with dollar cost averaging and pick a day of the month and put in a certain amount every month as you suggest. That way, when the price is high you buy less and when the price is lower you buy more. That is the point of dollar cost averaging- becasuse you can't know when the dips or peaks will occur. They can only be seen after they have already happened and then it is too late.

[Zippyjuan]

I did find one which looked at the year- again from Seeking Alpha.
http://seekingalpha.com/article/304334-the-best-time-to-own-gold-begins-now
http://static.seekingalpha.com/uploads/2011/11/2/saupload_RP_11-1-11_1.png

[Seraphim]

buying between 10am and Noon is usually a good idea. It doesn't happen every day but the "JP Morgan" smash is usually around 10am (for silver in particular).

If you're interested in silver, late morning (eastern time) is OFTEN the best time of day to book your price.

[Bern]

^^ Which time zone? ;)

[Seraphim]

It says Eastern in the last sentence.

DOH!

:)


^^ Which time zone? ;)

[Bern]

Please tell me you edited that in after the fact... Don't tell me I'm getting old... :(

[Seraphim]

Old!!

lol


Please tell me you edited that in after the fact... Don't tell me I'm getting old... :(

[Danke]

Please tell me you edited that in after the fact... Don't tell me I'm getting old... :(

Probably 'cause he didn't capitalize it: Eastern Time. :p