Yield Curve Playing a Role

The gold market is seeing some strength to begin the new trading week following the Thanksgiving Holiday shortened week. Some of the primary factors for gold’s recent strength are at work today, including a weaker dollar index and flattening yield curve.

The dollar is losing ground as investors deliberate the confirmation hearing for new Fed Chief Jerome Powell as well as the potential for a tax deal actually getting done. The dollar chart is not pretty at this point, and the currency could be eyeing a return back to the lows seen in September. Such a move could set the stage for a significant decline and a long-term top being in place.

The dollar does not currently have a lot to cheer about, and recent better data from the EU along with the unknowns surrounding key U.S. legislation could keep the greenback under pressure. A major break lower from the September lows could fuel a substantial drop in the currency’s value, and could be a major catalyst for sharply higher gold prices.

Also at work is the ongoing flattening of the yield curve. Long-dated treasuries have continued to hold relatively low yields and short dated debt has seen yields rise. This flattening of the curve could be indicative of several ongoing concerns. Certainly, the continued lack of any real inflation is playing a role in the debt market right now, and is an issue that the Fed will need to pay close attention to.

Such a scenario could point to longer-term rates remaining quite low for some time, and the lack of any real threat of sharply higher rates could also be considered very bullish for gold and other hard assets.

In what could also be bullish for the yellow metal, rising shorter-term maturities could give stock market investors more to think about as the aging bull market marches on. At some point, a tipping point may be reached when investors are more content going to the perceived safety of government bonds and notes rather than getting long more stock in a market that has moved as far up as it has for as long as it has.

All of these factors could point to higher gold prices in the weeks, months and years ahead. The choice to pay attention and take advantage of these signals is yours.

Now may be the ideal time to consider an allocation in physical gold. Adding this key asset class to your holdings has never been easier, and the timing of such a move might make a ton of sense given both the economic and geopolitical backdrops.

Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer your questions, and can even show you how to incorporate gold into your long-term investment plans using your IRA account.

Don’t ignore the writing on the wall. Now could be the beginning stages of a multi-year run higher in gold, as stocks become more susceptible to a massive decline with each new high. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started today.

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