The stock market had a great first quarter-no doubt about it. The question now is: Will the second quarter see the same degree of buying interest? Or will the rally begin to really fizzle?
Gold also had a solid first quarter. The yellow metal hung tough despite stronger stocks and a higher dollar index. It also performed well in spite of rising interest rates.
Could stocks and gold continue to rise together? Sure, there is certainly nothing to say that these markets cannot both climb at the same time. Perhaps a more important question to ask, however, is will they?
You could make the argument that markets are currently sending out some conflicting signals. On the one hand, you have stocks that remain not far from recent all-time highs and a market that has seen a very strong ascent since the Trump Presidential election victory.
At the same time, however, interest rates have not moved too far, and have been on the decline in recent days. The bond market appears to be quite stubborn, and has thus far not seen the major breakdown that many analysts have called for.
Along with interest rates holding steady, the gold and silver markets have been on the offensive as well, and are currently not far from their respective recent highs.
So what gives?
We suspect that at some point the markets will tip their hand, and when they do, it could lead to some significant movement.
April could potentially bring with it some fresh market volatility. What could fuel such potential volatility? Well, for starters, it is still unclear what the Trump administration may be able to accomplish. The recent rally in stocks has been built on the notion of major tax reforms and fiscal spending plans. Following the recent failure of the GOP to put together a vote to repeal the Affordable Care Act, however, investors may begin to really question the administration’s ability to pass key pieces of legislation.
This could definitely be a major factor in a potential stock market sell off.
Now add to that the uncertainty surrounding some key issues in Europe. French elections later this month could also be a major contributor to market volatility. If the hard-right leader Marine Le Pen were to win the election, it could have a significant impact on global markets and could spark selling in risk assets.
Should market volatility return, stocks could be sold off hard while perceived safe haven assets such as gold and silver could potentially benefit. Such a scenario could see stocks suffering major declines while the metals could see a major boost.
If you don’t currently have an allocation in these metals, now may be the ideal time to start one. Adding physical precious metals to your portfolio has also never been easier.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold and silver ownership. Our associates are here to answer any questions you may have and can even show you how to buy and hold these key assets using your IRA account.
Don’t wait for the next major stock market collapse before taking action. Explore your options today. Call Advantage Gold at 1-800-341-8584 to get started.Tags: advantage gold, affordable care act, elections, gold, rising interest rates, stock market, trump administration, volatility