The Trump administration has been in office for just about three weeks, and things have certainly gotten interesting. Although the recent immigration ban and halt to the U.S. refugee program have dominated headlines in the last week or so, investors are still anxiously awaiting the new administration’s plans for tax cuts and infrastructure spending.
Stocks and risk assets saw a nice ride higher in the aftermath of the Trump election victory, and have since cooled a bit. The dollar too, saw a nice move higher before running out of steam. Interest rates also spiked, causing some analysts to proclaim the bond bull market had come to an end.
Gold and silver, however, took the election victory in a totally different manner, and these metals saw heavy selling pressure in the weeks following the election.
Gold has seen some decent volatility, and after bottoming out in December has been on the ascent. Silver has also been trending higher, and as of right now these precious metals appear to be trending higher on increasing risk aversion.
IF things calm down and IF the Trump administration is able to implement some of the economic policies it campaigned on, it is possible that gold could potentially hit a wall at some point. Obviously, those are very big “Ifs” and things could potentially get a lot dicier in the coming weeks and months.
There are, however, two potential scenarios which could potentially benefit silver prices. These scenarios could look something like this:
- Increased Risk Aversion and Flight to Safety: If the new administration is unable to deliver on some of its key campaign promises, or if it alienates some key allies, risk aversion could potentially take hold. This could possibly mean a large stock market sell-off, declining interest rates and increasing market volatility. Silver, which is often viewed as a safe haven asset, could potentially do quite well in such a scenario.
- Tax Cuts and Massive Infrastructure Spending: If the new administration is able to cut taxes and roll out a massive fiscal spending plan, it could also be positive for silver. In addition, a rollback in regulations or a more business friendly environment could also give the white metal a boost.
Due to its perceived safe haven status as well as its growing use in various areas of industry, silver could potentially head higher from current levels regardless of what may happen with new policy implementation.
Currently trading at under $18 per ounce, the potential upside in silver prices would seemingly outweigh the potential downside.
If you do not have an allocation in physical silver already, now may be a great time to start one. If you already own some silver, now may be a great time to add to your holdings.
Doing so is quick and convenient, all you have to do is pick up the phone.
Speak with an Advantage Gold account executive today about the potential benefits of physical silver ownership. Our associates are here to answer any questions you may have, and can even show you how easy it is to buy and hold physical silver using your IRA account.
Don’t wait for silver prices to rise before taking action. Explore your options for physical silver ownership today. Call us at 1-800-341-8584 to learn more.Tags: advantage gold, gold, infrastructure spending, risk aversion, silver, stock market collapse, tax cuts, trump