Gold is moving higher again today, as the yellow metal continues to gain upside momentum. After declining to nearly the $1200 per ounce level earlier this month, gold has seen solid buying interest and has recouped almost $50 per ounce.
Recent price action could potentially be indicative of a major reversal in gold, and an upside breakout could see prices move significantly higher.
Although gold may have some bearish issues working against it, the metal also has a number of bullish factors that appear to be turning the tide.
The Fed has leaned to the dovish side of the ledger recently, and although the central bank hikes rates again, the outlook for further hikes appears to be cloudy. Ongoing geopolitical issues and an ongoing lack of inflationary pressures could allow the central bank to keep its foot on the gas regarding monetary policy. Even with the possibility of another rate hike this year, the era of low rates appears set to continue for some time to come.
For numerous reasons, including discussion in the previous paragraph, the dollar index remains on the defensive. The combination of ongoing low rates, lack of inflation and Congressional gridlock are all likely playing a role in the dollar’s recent downside. It appears that the greenback has put in a top, and charts would seemingly indicate that the currency could potentially have a lot further to fall before finding a long-term bottom.
Stocks could also be approaching a long-term top, and some analysts are calling for a top to be made in the coming weeks. Low rates and QE have fueled the massive stock market rally that has gone on for nearly a decade now, but at some point the party will come to an end. Recent price action in equity markets could simply be viewed as a “last call” to draw in any remaining capital left sitting on the sidelines before the market takes what could be a violent turn to the downside.
Looking at the current economic and geopolitical backdrop, it is difficult-if not impossible-to come up with any meaningful reasons to not own gold as part of your portfolio. In fact, in addition to potentially being on the verge of a major upside breakout and protracted bull market, gold may also serve other key purposes within your portfolio. Gold may potentially provide a meaningful hedge against further dollar weakness, a stock market collapse or even recession.
If you do not already own gold as part of your holdings, now may be the ideal time to consider starting an allocation, as it is possible that current prices may prove to be a massive bargain if the yellow metal takes off.
Buying and holding gold has never been easier than it is today. Speak with an Advantage Gold account executive today about the numerous potential benefits of physical gold ownership. Our account executives are here to answer any questions you may have, and can even show you how easy it is to buy and hold physical gold using your IRA account.
Don’t wait for the next major stock market collapse or for the next major bull market in gold to get away from you. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, dollar index, gold, interest rate hike, momentum, qe, reversal