Grams a month: cost-averaging into gold

01The problem with waiting for a dip

Almost everyone who intends to buy gold spends a period waiting for a better price. Sometimes the better price arrives. Often the market moves the other way and the wait becomes its own expensive decision.

Nobody reliably calls tops and bottoms in a market driven by interest rates, currencies and geopolitics at once. Planning around the assumption that you will is optimistic.

02How averaging works

You commit a fixed sum on a fixed schedule, monthly for most people, and you buy whatever that sum buys on the day. When the price is high your money buys fewer grams. When it is low it buys more.

Over time your average cost per gram settles below the average price across the period, because more of your money was deployed at lower prices. You are not predicting anything. You are simply refusing to concentrate all of your risk on one date.

03Making it work with premiums

There is a tension worth naming. Averaging favours frequent small purchases, and small bars carry a higher premium per gram. Buying a one-gram bar every month is more expensive per gram than buying a fifty-gram bar twice a year.

The practical compromise is to save on a schedule and buy in larger steps. Set the money aside monthly, then convert it to metal when it reaches a size where the premium per gram is reasonable. You keep the discipline of averaging without paying the small-piece surcharge every month.

• Decide the monthly amount before you look at the price
• Accumulate until you can buy a mid-weight piece rather than the smallest one
• Buy on the schedule, not on the news
• Use the calculator to see what your amount buys at the current rate

04What discipline actually looks like

The hardest month is the one where gold has just risen sharply and buying feels late. That is exactly the month the plan exists for. The second hardest is when it has fallen and buying feels foolish. Same answer.

A plan you follow through both of those is worth more than a better plan you abandon.

05Reviewing rather than tinkering

Set a review date once a year. Check whether the monthly amount still fits your income and whether your overall holding has grown beyond the share of savings you intended for gold.

Between reviews, do nothing. The strategy works because it is mechanical.