The stock market recently forged fresh all-time highs as President Donald Trump promised quick action on tax reforms. Stock markets had been seeing some consolidation in recent trade, as investors appeared to be taking a wait and see approach.
Without a doubt, the new administration has hit some stumbling blocks. The recent immigration bad was halted by a federal judge, and thus far appeals on the ruling have not been favorable for the administration.
Trump adviser Kellyanne Conway may potentially be in some hot water after endorsing Ivanka Trump’s brand which was recently pulled from Nordstrom stores due to what the company said was simply poor sales.
The President himself even commented on the situation via twitter, and Nordstrom stock did see some selling (although it recovered very quickly) quite possibly as a direct result of his comments.
Regardless of whether you agree or disagree with the policies and actions of the new administration, financial markets may face a number of risks in the coming months.
Some of the potential catalysts for rising market volatility include:
- Government discord
- Rising geopolitical tensions
- Rising interest rates
- Escalating inflationary pressures
All of the above could potentially pose significant challenges to equities and risk assets. Outside of a government shakeup or significant geopolitical event, however, a recession could potentially be the next major issue investors must contend with. It could also potentially be very, very bullish for gold prices.
Even with all of the talk about rising rates and Trump perhaps being more of a policy hawk, the Fed appears to be maintaining a relatively cautious approach to tightening. Although a March rate hike is on the table, June seems to be the most likely target date for the next hike from the central bank.
Even with another rate hike or two, rates will still be very, very low. If and when the next recession does come along, which could potentially be sooner than many think, rates could very well find their way right back to zero.
On the other hand, the Fed might also see fit to fight the next recession by throwing money at it in the form of QE or other stimulus measures.
It would seem that either way, the government will have no choice but to spend money-a lot of money-to keep the economy going.
Such a scenario could potentially send gold prices to levels not seen in years, in fact, if the Fed is forced to lower rates again or start up the printing presses, gold could potentially test its previous all-time highs and perhaps embark on a fresh leg higher in price.
The time to catch what could potentially be a runaway gold train is now.
Gold has been moving higher since the New Year began, and the possibility of recession as well as geopolitical risks may keep the yellow metal well-bid. Odds of a recession are increasing by the day, and it would seemingly become a question not of “if” but “when.”
Speak with an Advantage Gold account executive today about the potential benefits of physical gold ownership. Our associates are here to answer your questions, and can even show you how to buy and hold physical gold using your IRA account.
Don’t wait for the next stock market crash or for the next recession to take hold. Explore your options for physical gold ownership today. Give us a call at 1-800-341-8584 to get started.Tags: advantage gold, fed policy, gold, immigration ban, interest rate hike, stock market collapse, trump