Dollar-Cost Averaging Into Gold
The stress-free strategy for building your gold position over time. Buy regularly, ignore the noise, and let math work in your favor.
What Is Dollar-Cost Averaging?
Dollar-cost averaging (DCA) means investing a fixed dollar amount on a regular schedule—regardless of price. When gold is expensive, you buy less. When gold is cheap, you buy more.
Over time, this typically results in a lower average cost than trying to time the market.
Why DCA Works for Gold
✓ Benefits
- Removes emotion from buying decisions
- Eliminates timing stress
- Automatically buys more when prices drop
- Reduces impact of short-term volatility
- Builds discipline and consistency
- Works with any budget size
✗ Considerations
- May underperform lump sum in rising markets
- Requires discipline to continue during drops
- Multiple purchases = more transaction costs
- Takes longer to reach target allocation
DCA in Action: Example
Imagine you want to invest $6,000 in gold. Compare lump sum vs. DCA over 6 months:
| Month | Gold Price | DCA: $1,000/mo | Oz Purchased |
|---|---|---|---|
| Jan | $2,600 | $1,000 | 0.385 oz |
| Feb | $2,500 | $1,000 | 0.400 oz |
| Mar | $2,400 | $1,000 | 0.417 oz |
| Apr | $2,550 | $1,000 | 0.392 oz |
| May | $2,700 | $1,000 | 0.370 oz |
| Jun | $2,650 | $1,000 | 0.377 oz |
| Total | Avg: $2,567 | $6,000 | 2.341 oz |
The Math
DCA Result: 2.341 oz at avg cost of $2,563/oz
Lump Sum in Jan: 2.308 oz at $2,600/oz
DCA gave you more gold because you automatically bought more during the March dip.
Setting Up Your DCA Plan
Decide Your Total Amount
How much total do you want to invest in gold? This could be a target allocation (e.g., 10% of portfolio) or a fixed dollar amount.
Choose Your Schedule
Monthly
Most common, easy to automate
Quarterly
Fewer transactions, lower costs
Weekly
Maximum smoothing, more work
Calculate Per-Purchase Amount
Divide your total by the number of purchases. Example: $12,000 over 12 months = $1,000/month.
Stick to the Plan
This is the hard part. Buy on your scheduled day regardless of price, headlines, or emotions. The whole point is removing decision fatigue.
DCA Schedules by Budget
| Total to Invest | Monthly (12 mo) | Quarterly (4 qtr) |
|---|---|---|
| $6,000 | $500/month | $1,500/quarter |
| $12,000 | $1,000/month | $3,000/quarter |
| $25,000 | $2,083/month | $6,250/quarter |
| $50,000 | $4,167/month | $12,500/quarter |
DCA vs. Lump Sum: When to Use Each
Use DCA When:
- • Markets are volatile or near highs
- • You're nervous about timing
- • You're investing a large sum
- • You want to reduce regret risk
- • You're new to gold investing
Use Lump Sum When:
- • Gold has dropped significantly (10%+)
- • You have conviction in your timing
- • The amount is small relative to portfolio
- • You want to minimize transaction costs
- • You're rebalancing, not new investing
Automating Your DCA
Gold IRA Auto-Buy
Some Gold IRA companies (like JM Bullion's program) offer automatic monthly purchases. Your custodian invests a set amount each month without any action required from you.
Calendar Reminders
Set a recurring calendar reminder for the same day each month. When it fires, place your order. Simple but requires manual action.
Bank Auto-Transfer
Set up automatic transfers to a separate "gold fund" account. When it hits your target, place an order. Builds savings habit.
Your DCA Action Plan
- 1. Decide total amount to invest in gold
- 2. Choose 6-12 month DCA timeline
- 3. Divide total by number of months
- 4. Pick a specific day each month (e.g., 1st or 15th)
- 5. Set calendar reminders
- 6. Execute on schedule—ignore price movements
- 7. Review after completing the plan