A Powder Keg

Gold is seeing a moderate pullback on Tuesday following gains to start the week. The situation with North Korea appears to be deteriorating, and investors finally appear to be waking up to the fact that an armed conflict could potentially be seen in the coming weeks or months.

North Korea has stated that the U.S. has declared war on the nation, and has also threatened to attack U.S. bombers even if not in North Korean airspace. This follows President Trump’s threat to destroy North Korea if it attacks the U.S. or its allies.

Not since the darkest days of The Cold War has the threat of nuclear conflict been so serious. Although diplomatic channels remain open and hope remains for a peaceful solution to the ongoing conflict, the rhetoric from both sides has taken a nasty turn for the worse. In fact, the worry now may be that a simple miscalculation by either side could potentially trigger all-out war, and the consequences could be disastrous.

Until a resolution is found, markets may potentially be walking on egg shells, and appetite for risk could begin to wane. If risk appetite does begin to falter, market volatility could potentially rise as investors shed risk assets in droves.

Although the recent upside in gold cannot be completely attributed to rising geopolitical tensions, the conflict with North Korea is certainly fueling some risk aversion and buying in the yellow metal. Stocks may also be paying attention to the escalation in tensions, although a significant sell-off remains elusive. That could change, however, and change quickly. If war does in fact break out, stocks could potentially fall through the floor while perceived safe haven assets like gold and bonds go through the roof.

While there are many solid reasons for buying physical gold right now, the situation with North Korea has the potential to fuel a massive rally in the market, and gold has the potential to rapidly climb by $100 or even several hundred dollars per ounce if military action is taken. Gold may continue to rise based on other factors as well, and a protracted bull market could be getting underway just as stocks may be finally topping out.

Hopefully, such a scenario does not play out, but in the meantime, hard assets may stay on the offensive and any significant dips in price could be aggressively bought.

Given the current state of geopolitics, an aging bull market in stocks and a relatively weak dollar, now may be the ideal time to buy real, physical gold. Buying and holding gold has never been easier than it is today. With or without the Korean conflict, there are as many reasons to buy and hold physical gold as ever before.

Speak with an Advantage Gold account executive today about the potential benefits of physical gold ownership. Our associates are here to answer any questions you may have, and can even show you how to buy and hold physical gold using your IRA account. Don’t wait for higher gold prices or for the next major stock market collapse before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.

Tags: , , , , ,