With stocks making fresh all-time highs and economic optimism seeing a large increase in recent months, some investors may be questioning the value of hard assets like physical gold. But make no mistake, there are just as many reasons right now to hold gold as ever before.
Despite the potential for further interest rate hikes from the Fed, gold has a number of issues that could not only keep it well-supported but could also potentially fuel a significant rally from current levels.
Weak economic data seen in recent weeks could potentially be the first wave of more to come. Chances of a recession appear to be on the rise, and calling the stock market “long in the tooth” at current levels could be putting it mildly. Another disappointing jobs number could also potentially keep the Fed more accommodating for longer.
Several Arab nations have cut ties with Qatar in recent days, citing actions taken by the nation as being destabilizing for the region. This situation has the potential to impact crude oil prices, and is another rift in current geopolitical tensions.
On Thursday, the U.K. will begin elections, while the ECB will hold its latest meeting on monetary policy.
The U.S. Fed will be meeting next week, and it is widely expected that the central bank will raise rates by another 25 basis points. The question is: Does it matter?
In a recent piece by Kitco.com, analysts from TD Securities said there are “Plenty of reasons to keep gold in your portfolio.”
They were quoted as saying “Persistent economic weakness, political uncertainty and a stock market on edge should keep gold well supported at this higher range in the near term.”
Even if the Fed does hike another 25 basis points, the likelihood of a September rate hike seems to have declined, and the central bank could reiterate a very gradual approach to normalizing policy. This could be bullish for gold, and the yellow metal could potentially rise even in spite of additional rate hikes.
Clearly there appears to be a disconnect right now between stocks and bonds. Stocks have continued their ascent, but bonds have been rising steadily as well. This will likely not be the case for too long.
Rising bonds and falling rates may be indicative of risk aversion, and could potentially signal that stocks may be running out of gas-and soon.
With many reasons to have an allocation in physical gold, why wait?
Now may be the ideal time to build an allocation in gold or add to current holdings. Buying and holding physical gold has never been easier.
Speak with an Advantage Gold account representative today about the potential benefits of physical gold ownership. Our precious metals professionals are here to answer your questions, and can show you how to take advantage of your IRA account when building a precious metals portfolio.
Don’t wait for the next major economic crises or stock market crash. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started.Tags: advantage gold, ecb, Fed, gold, political uncertainty, qatar, rate hikes, uk elections