Friday morning saw the release of the highly anticipated non-farm payrolls data for July. According to the U.S. Department of Labor, the country added 215,000 jobs while the unemployment rate held steady at 5.3 percent. The data was in line with expectations, as consensus estimates were looking for a number of 212,000 jobs created. In addition, there were upward revisions to previous data that added another 14,000 jobs over the previous two months.
While this may seem like good news for our economy, Wall Street doesn’t like it one bit. The markets showed their unhappiness, and the DOW was negative for seven days in a row, an event that hasn’t happened in four years.
The jobs number was considered to be very important for the Fed. Job creation above the 200,000 mark will likely pave the way for the central bank to hike interest rates in September. If the non-farm payrolls data released next month for August comes out in a similar fashion, a September rate hike becomes almost certain.
Despite this, the dollar lost ground today while gold and silver both saw willing buyers…
A likely reason for such a move is the fact that some degree of uncertainty was removed today…
The debate about the Fed and its plans regarding interest rates seems to be over.
The writing is on the wall…Rates are going higher.
While this comes as no surprise, markets have a funny way of reacting in the opposite way than most market participants think.
Gold and silver are no exception.
We have talked previously about the potential for a large rally in gold and silver once the Fed does act. It appears that such a rally may come to fruition sooner rather than later…
Gold and silver both saw buying interest today as short covering took place and bargain hunters stepped in to buy the metals at highly discounted prices.
Physical demand for these metals has remained quite robust…
Stocks, on the other hand, saw some significant selling today on the notion of higher rates. For those that don’t know-Markets don’t like higher rates.
This could be the beginning of another great asset rotation.
The type of rotation that leaves the unprepared at a loss for words as to what happened. The type of rotation that can potentially reap significant benefits for those that see it coming.
The type of rotation that can lead to significant and rapid wealth destruction and wealth accumulation.
If you take a closer look, you will likely see what I am talking about.
Stocks have been on a tear higher for seven years now-SEVEN YEARS…
On the other hand, precious metals have been moving lower since reaching their 2011 highs.
Stocks have been showing some significant signs of a top while precious metals have been showing signs of a bottom.
Do the math…
The pullback in gold and silver appears to be coming to a close. Gold’s ability to hold recent levels simply shows that buyers are now matching sellers.
As physical demand remains strong and as production is cut further, it will likely not be long until buyers are outnumbering sellers.
More buyers than sellers equal higher prices.
We believe that gold and silver are poised to move higher from current levels regardless of what the Fed does. The laws of supply and demand tell us so.
Besides-any increases in rates are likely to be very slow and incremental. The economy is still too fragile to tolerate higher rates. We know it and the Fed knows it…
In our view, gold and silver are gearing up for a significant turnaround-a turnaround that has been several years in the making now.
It is not higher or lower rates, more jobs or less jobs or economic strength or weakness that will drive this rotation into precious metals…
It is simple supply and demand as well as the need for a reliable store of value. Perhaps more importantly, the fear index is hitting extremely high levels. The Fed raising rates may be the sign that all traders have been waiting on, and may now start exiting the markets en-masse. All of that money will need a place to flow. We believe metals will be the place that many investors will find the safety and value.
If you take a good, hard look at the bigger picture, we think you will agree.
The only question to be asking now is “Do I want to buy silver for less than $15.00 an ounce and gold for less than $1100 or do I want to pay more?”
Do yourself a favor. If you see the value of physical gold and silver ownership, don’t wait to explore your options.
Don’t wait until the great asset reallocation is already in full swing.
A precious metals IRA is one of the most convenient ways to add physical, tangible metals like gold to your portfolio.
In today’s uncertain and ever-changing economic times, an allocation in hard assets like gold can not only provide monetary benefits but can provide peace of mind as well.
Please reach out to our experienced precious metals executives with any questions that you might have about investing in gold and the process of setting up a Gold IRA. Call us today at 1-800-341-8584 FREE to get started