Both gold and silver have been hit hard in recent weeks. The surprising Presidential victory of Donald Trump has economic and inflation expectations on the rise, and stocks and the dollar moving higher. Bond yields have risen as many analysts are calling the end of the great bond bull market.
Although gold and silver remain susceptible to further selling in the near-term, some analysts believe these markets have better days ahead.
In a recent article on Kitco.com, analysts from one German-based bank were quoted discussing higher gold and silver prices. Analysts from the bank were quoted as saying, “The headwind from U.S. dollar appreciation and the rise of bond yields should abate and investment demand should pick up again also, given the numerous risk factors. Furthermore, the only modest gold demand in Asia this year should revive noticeably.”
Although gold’s recent slide could be attributed to several factors including stronger risk appetite, a stronger dollar, higher yields and lower demand, analysts are still optimistic about a rebound.
The Commerzbank analysts added: “This year’s moderate demand for gold in Asia is likely to pick up thanks to low prices and an improved income situation among India’s rural population following a better monsoon season.” They also reportedly described central bank buying weakness as “probably temporary.”
Although the dollar may continue higher and interest rates could continue to rise, these current pressures on the gold price are likely to moderate. Physical demand may pick up again, as large buyers and long-term investors look to take advantage of current price levels.
The globe also still remains awash in ultra-low rate monetary policies and QE.
The gold market still has-and in our view always will have-numerous fundamental factors that behoove gold ownership.
Although the idea of price appreciation is a nice benefit of physical gold ownership, some key reasons to consider a significant allocation in physical gold include:
- A potential hedge against falling currency values
- A potential inflation/deflation hedge
- Global recognition and trade
- Carries zero counterparty risk
In our view, there are many reasons to acquire and hold physical gold and other precious metals.
The only question is: Would you rather buy low or buy high?
The recent selling in gold may have already run its course and higher prices may lie ahead.
Now may be the ideal time to begin an allocation in physical gold or to add to an existing physical gold portfolio. Doing so has never been easier.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold ownership. Our precious metals professionals are here to answer your questions and to show you the most convenient way to begin adding physical gold to your investment portfolio. We can even show you how to buy and hold physical gold using your IRA account.
Don’t wait for the next market meltdown or for gold prices to rise. Explore physical gold ownership today. Call us at 1-800-341-8584 to get started now.Tags: advantage gold, asia demand, commerzbank, gold, monetary policy, rising bond yields, strong dollar