When is the best time to buy silver?

Trying to figure out the best time to buy precious metals is one of the most common questions I get.

• “The price has dropped a couple of percent … surely this is the perfect time to buy?”
• “Prices have been stagnant; surely this means silver and gold are consolidating and prices are about to explode so should I buy now?”
• “Prices are running, and the rand is weak … should I pull the trigger now or wait for prices to retract?”
• “Do you think I should wait for silver coins to drop to below R600 per ounce before I buy?”

These are just a few variations of the same question. How would you answer this question? My answer is the same every time!

“Yesterday.”

Allow me to address the elephant in the room! A good case can be made that my answer to the above questions should be considered irrelevant because I am a bullion dealer. It’s like asking a pastor when the best time is to go to church. Or a personal trainer when is the time to go to the gym and exercise.

Well, permit me to let the “obvious” cat out of the bag and declare (like the pastor and the personal trainer), that I believe the best time to buy precious metals is yesterday. In my defense, I would like to present my rationale by making two arguments for the rationality of my position, notwithstanding the reality that I trade the product that I encourage others to buy.

Firstly, take a look at the 20-year rand price of gold and silver.

Assuming that you are a long-term investor talking with someone who owns no or very little precious metals, when would you tell them that it was precisely the right time to have purchased silver and gold? No matter how you twist and turn these charts, a clear argument can be made that the best time was “as early as possible.” If you purchased an ounce of gold 20 years ago, it is better than having purchased it 5 years ago. If you purchased silver before the COVID lockdowns, it was better than having purchased it a year ago. So, the best time to buy is yesterday in my humble opinion. The second-best time is today.

Secondly, I think the question (“When is the best time to buy?) is framed incorrectly because the question presupposes that there is an objectively wrong and an objectively right time to buy in the long term. But there isn’t! (Beyond the obvious pre-requisite of having cash flow available to make a purchase.) Allow me to re-phrase the question slightly which will make the rationale for my answer more obvious: “When is the right time to convert your devaluating fiat currency into an inflationary hedge?”

Here’s another way to ask the same question: “When is it the best time to convert my currency that is devaluating at 1-2% per month into an asset that over the past 30 years has provided a price growth of over 1000% (gold)?”  Isn’t the answer glaringly obvious?

Unapologetically, then, whether in my capacity as a bullion dealer, or as someone trying to afford retirement, as a father trying to put aside an inheritance for my children, or even as a son saving silver and gold so that I can take care of my parents in their old age, my honest opinion is that the best time to buy silver and gold always lies in the past. A close second-best time is today.