There are plenty of professional investors who advocate investing in gold as part of your overall portfolio, so that you can enjoy long term gains and be there when political and economic uncertainties send the price of gold higher.
History offers us a number of solid examples where gold has become highly sought-after in times of stock market turbulence and there seems to be a point arriving at the present time where the price of gold might enjoy an upward surge.
Regular tales of woe relating to Greece and the fear that they are likely to default and send the rest of the eurozone into a panic, can be found in the media on a daily basis, which is inspiring some investors to buy gold coins and bars as a hedge against the expected backlash if Grexit becomes a reality.
Germans leading way
Putting aside the political tensions that exist between Greece and Germany, it seems that German investors are more convinced than the rest of us that a Greek default could bring down the eurozone.
Figures published by the world Gold Council for the first quarter of 2015 revealed that German investors in particular, are leading the way in gold buying. They increased their level of buying gold coins and bullion by 20% in the first three months of 2015 to 32.2 tonnes, which is the highest rate of buying witnessed in the last 12 months.
Not the only ones
It is probably not a case of German investors knowing something that the rest of Europe doesn’t, as an increase in buying levels was widely seen across the rest of eurozone.
The World Gold Council indicated that the first quarter of 2015 has seen the strongest levels of demand for gold coins and bars at the start of a year, since 2011.
There is little doubt that German investors are definitely concerned over a range of issues such as the ECB, Greece and also Ukraine, which is prompting them to stockpile a bit more gold than usual.
Many investors consider gold to be a safe-haven asset, so the strong buying of gold across Europe is clear evidence of a growing sense of unease and uncertainty over central bank policy and the tense standoff that we currently seeing between Athens and its nervous creditors.
The bigger picture
The headline question posed was when is a good time to invest in gold?
Some investors, especially those in Germany appear to think that time has arrived, but is it always that straightforward when it comes to getting the timing right?
If a Greek tragedy is avoided and the eurozone manages to find the right economic sticking plaster to hold everything together, it is likely that stock markets will react positively and the price of gold might fall back slightly.
Trying to find a smart entry point to benefit from a spike in gold prices is certainly possible if your investment coincides with pivotal news that causes a reaction in financial markets, but despite the obvious turmoil and anxiety created by the Greek situation, many investors who take a long term view for their gold holdings, will not fret either way.
Asia still dominates the gold market
The fact that China and India accounted for 54% of consumer demand for gold in the first quarter of 2015, demonstrates that despite higher demand from European investors, Asia still dominates the gold market.
Interestingly, the reason put forward for recent strong demand in this part of the world, is the fact that uncertainty is growing that the China credit bubble is inflating to such a point that the financial markets will soon realise that the country will be unable to sustain such rapid rates of economic growth.
Still lower gold demand despite fears
All the talk of Grexit and the economic bubble bursting in China would seem to be strong signals that it might be a good time to get into gold.
Despite these two specific scenarios ramping up levels of angst amongst investors around the globe, in value terms, demand for gold is actually lower in the first quarter of 2015 than it was for the same period 12 months ago.
Although this seems to contradict the strong volumes reported earlier in the article, the important point to note is that the average gold price is 6% lower than for the same three-month period last year, meaning that the £26.6 billion of sales, is actually 7% less in monetary terms than 2014.
What all this means to investors is that the global gold market’s ecosystem is functioning as it should do and simply demonstrates that gold continues to hold a unique relationship with investors and continues to demonstrate an ability to rebalance over time, regardless of what economic tragedies have played out in the interim period.
The behaviour of gold prices over the last 100 years would tend to suggest that for the long term investor, there is no specific smart entry point to look out for, although a historical perspective of how markets react to bad news, would suggest that the gold price will react in the short term if the Greeks hold their hands up and say they can’t pay.