The commodity bull market has seemingly begun. Oil prices are now trading at multi-year highs, with Nymex crude trading over $72 per barrel and Brent crude trading around the $80 level. Crude has been on the offensive even as the dollar index has also moved up to multi-month highs.
The strength being seen in oil is likely due to several factors, however, recent economic strength and the potential for lower supplies are two of the main drivers. Some analysts have already begun to suggest that $100 crude could be seen in the months ahead.
Renewed sanctions against Iran could make less oil available on the market, and could be supportive of higher prices.
Oil is the most heavily traded commodity on the planet. It is widely viewed as the leader of the commodity space, and higher oil can have a tendency to pull other commodity prices higher as well. This tendency is already being seen, as grains and other commodities increase in value.
Looking at the big picture, higher crude oil prices are a strong indicator of rising inflationary pressures. The fact that oil has maintained recent upside in spite of the current dollar rally is another indication that a commodity bull market has begun. At some point, the dollar will likely give way once again, reversing course and heading back to recent lows or even beyond. Such a reversal in the dollar could send commodity prices soaring, making $100 oil a distinct possibility.
Higher oil will likely make gasoline prices higher as well, and motorists could end up paying significantly more at the pump in the coming months.
The Fed will try to control rising inflation through monetary policy. The Fed may not, however, act aggressively enough as it seeks to strike a balance between fostering growth while keep inflation in check. In fact, the central bank may already be behind the curve.
That’s why now is the time for you to try to get ahead of the curve. Inflation eats away at disposable income and real returns. It drives up the cost of everyday goods and services, leaving less and less money for anything else. If wages do not keep up with inflation, it can become especially problematic.
Before inflation rises further, now is the ideal time to add assets that can potentially provide a hedge against rising prices. The first asset class that should be considered is physical gold.
Gold has been considered a reliable store of wealth and value for centuries. Not only does it have significant upside price potential, but it may also potentially provide an important hedge against inflation, declining currency values and geopolitical issues.
Adding this key asset class to your portfolio has never been easier. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer any questions you may have, and can even show you how to build a significant allocation in gold using your IRA account.
Don’t wait for $100 oil and rising prices to take a bite out of your income and savings. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, brent, dollar rally, gold, inflation, monetary policy, oil