There seems to be a large consensus that the potential for further rate hikes from the Fed in the second quarter and beyond could derail the rally seen in gold in recent months. A more aggressive central bank, a stronger dollar index and robust appetite for risk are all reasons given for what could be the yellow metal’s “demise.”
Thus far, however, none of these issues or potential issues has been able to put a halt to the buying in gold. In fact, the gold market could be poised for a fresh and substantial leg higher if an upside breakout from the recent trading range is seen.
Despite what analysts and “experts” may think, the market is always right. Thus far, the gold market is showing that it wants to go higher, and investors have thus far been happy to keep bidding the price of gold higher.
The recent Fed decision to raise the Fed Funds rate by a quarter point did not solicit much of an effect from gold investors.
The dollar index moving back above the 100 level has thus far not sent gold investors scrambling for the exits.
The rally in stocks has also not driven investors away from gold, and the yellow metal has remained on the offensive even as appetite for risk has remained strong.
Perhaps some investors know something that others don’t. Perhaps some investors see a great long-term buying opportunity in gold at current levels. An opportunity they find attractive when compared to the aging bull market in stocks.
Perhaps the Fed will not end up being as aggressive with monetary policy as some currently believe. Perhaps the central bank could even potentially find itself in a position of having to lower rates again rather than raise them.
Maybe stocks will keep moving higher, or maybe they are simply getting ready for the next major stock market crash that wipes out billions of investor value.
Whatever the case may be, it really doesn’t matter. Gold could go higher-much higher-regardless.
The herd mentality is an interesting phenomena, and it may once again play out the way it often does: Sucking in as many unsuspecting investors as possible before a major market reversal that inflicts as much pain on as many investors as possible.
Looking at the current stock market, some might even say that the writing is on the wall.
You can join the crowd and possibly suffer the consequences, or you can be proactive right now and make some decisions.
If you don’t already have an allocation in physical metals, now may be the ideal time to start building one. Doing so has never been easier.
Speak with an Advantage Gold account executive today about the potential benefits of physical metals ownership. Our professionals are here to answer any questions you may have, and can even show you how to buy and hold physical metals using your IRA account.
Don’t wait for the next major stock market collapse before taking action. Explore your options now. Call Advantage Gold at 1-800-341-8584 to get started today.Tags: advantage gold, central bank, dollar index, fed funds rate, gold, herd mentality, interest rate hikes