Gold is showing some undeniable signs of strength that could be indicative of an upcoming breakout in price. While those that are only near-sighted or looking to trade the metal over the short-term may be frustrated with its recent trading range, smart long-term investors may see the current range as a great opportunity to acquire more of it before prices really take off.
There are two current issues being seen in the market that are noteworthy:
First, the gold market has seen any significant declines. Every time the market makes a move lower and checks out support levels, those levels have produced buyers. Coincidence? Not likely. This would seemingly indicate that patient, long-term investors are more than happy to scoop up gold on any dips in price. The interesting thing about markets that have been in a trading range is the tendency for such markets to see larger breakouts based on longer trading ranges. What could this mean for the gold market? It could mean that the longer the market moves relatively sideways, the greater the price move will be away from the range. Given the fact that there simply is not a lot to justify a downside breakout, a solid upside breakout cold take prices significantly higher from current levels.
Also of particular note is the fact that the stronger dollar recently has not fueled any significant selling in gold. Gold tends to have a strong correlation with the dollar index, but that correlation seems to be weakening. In fact, it could show strong underlying demand. If the dollar is stronger, it makes gold relatively more expensive for foreign buyers since gold is a dollar-denominated asset. If those buyers are still willing to buy gold even at relatively higher prices, there is likely a good reason. A break away from the standard dollar/gold relationship would seemingly indicate that demand for the yellow metal is quite robust, and that not even a stronger greenback can stand in the way of higher eventual prices.
Any selling in gold has been met with willing buyers, and eventually that buying pressure may overwhelm sellers. The move could be swift and significant, and may mark the beginnings of a major, protracted bull market in gold.
Now may be the ideal time to add further diversification to your portfolio with physical gold. This asset can not only provide a means of added diversification and the potential for massive price appreciation, but may also provide an important hedge for your portfolio against a number of economic and geopolitical issues such as inflation and declining currency values.
Adding this key asset class to your holdings has never been easier than it is today. Speak with an Advantage Gold account executive about the potential benefits of gold ownership. Our representatives are here to answer any questions you may have, and can even show you how easy it is to invest in physical gold using your IRA account.
Don’t wait for the next major breakout to happen without you. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.Tags: advantage gold, breakout, dollar, dollar index, gold, inflation