With little economic data set for release this week, investors will likely focus on the recent FOMC meeting as well as any headlines regarding the Trump administration’s travel ban and other policies.
Last week, the FOMC voted to keep rates steady at current levels and did not give much of a time table in terms of hiking rates further. Although markets were not expecting any action from the Fed last week, the lack of further clarity on additional hikes could potentially fuel more buying interest in gold and silver while sending a message of caution to markets.
The central bank appears content taking a wait-and-see approach for the time being, and may want to see specifically what the Trump administration plans in terms of fiscal spending before becoming more aggressive with rates.
A March hike is certainly on the table, but at this time June appears to be the most likely time for another rate rise.
The Trump travel ban continues to garner considerable headlines, and this issue could potentially continue to make waves for some time to come.
The travel ban was halted after a Federal Judge’s ruling on Friday, and a Justice Department appeal was denied on Sunday.
The back and forth on the issue has led to significant media coverage, and the legal battle is set to continue. The issue has also taken on a more vicious tone, with President Trump even using social media to attack the federal judge who issued the ruling.
The travel ban could be just the first of many major issues that could be the subject of significant battle in the coming months and years, and some investors appear to be looking to hard assets like gold and silver to provide a sense of security.
Gold has been on the offensive in recent weeks, even as stocks have also maintained recent upside. Bonds have also stemmed their recent bleeding, and rates could potentially back down again if risk aversion really begins to set in.
It would seem that at some point, something’s gotta give. The question is will it be stocks and risk assets or alternative asset classes like gold and silver.
The recent political issues could be just the tip of the iceberg. Further issues could potentially create a significant political divide, a divide that has the potential to fuel a major sell-off in equities and risk assets.
Now may be the ideal time to take a good, long look at your portfolio. Now may be the ideal time to consider an allocation in hard, physical assets like gold and silver.
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