The gold market is showing some impressive signs of strength in recent weeks after pulling back from the highs seen in mid-September. The market is trading back above the $1300 level and holding its ground. The yellow metal could potentially make a quick run back to those highs seen last month around $1350. The question is: Will the market be able to make a sustainable move higher?
Gold has a number of key issues currently working in its favor, with two potential hurdles. The market is likely moving higher against the current geopolitical backdrop, a relatively weak dollar index and overall risk aversion. From a technical standpoint, the market looks strong and appears poised for further gains. In our view, there are really only two things that could possibly stand in the way of higher gold in the coming months: A more aggressive Fed and an even stronger stock market.
Stocks have continued to make fresh all-time highs, and it seems even more investors are being lured into equities despite the age of the current bull market. With each new high, however, the likelihood of a major collapse becomes more and more pronounced. When that day of reckoning comes, investors could be in for a rude surprise. With the 30 year anniversary of Black Monday coming up, now may really be the time to consider equity exposure. The market lost almost a quarter of its value on that day, and similar declines today could equate to a loss in the Dow of some 5200 points.
The potential for a stock market meltdown brings us to the next potential roadblock: A more aggressive Fed. Although the central bank recently reiterated its forecast for another rate hike this year and three additional hikes next year, the likelihood of the Fed following through may be questionable. Even if it did, rates would still be at historically low levels. A major geopolitical event, stock market crash or recession could all potentially keep the central bank on hold. In fact, it is completely fathomable that not only could the Fed remain on hold, but it could decide to cut rates again.
The bottom line is this: There may be no significant issues that could stop a significant rise in gold in the coming months and years. So what are you waiting for?
Now may be the ideal time to consider an allocation in this key asset class. With the potential for a stock market reversal and a weaker dollar, hard assets like gold may play a major role in the protection of your wealth.
Speak with an Advantage Gold account executive today about the potential benefits of physical gold ownership. Our account 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 the next major stock market crash or for higher gold before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.Tags: advantage gold, black monday, bull market, Fed, geopolitical tension, gold, stock mrket