As the summer trading doldrums continue, the gold market has not seen much excitement. The market has, however, dipped down near the $1200 level on several occasions before snapping back by several dollars per ounce. The market seemingly has plenty of reasons to be testing the $1200 level and perhaps even breaking down below it, but thus far it has failed to do so. Could this be an indication of a bottoming process?
Although things may not really begin to heat up again until next month once many investors have finished final summer vacations, the lack of further downside in the market could be seen as constructive. After all, with stocks within striking distance of fresh all-time highs and the dollar remaining stronger, many might assume that the market should be probing new lows at this point.
The dollar may finally be running out of gas, and that could be a major factor for the selling pressure beginning to subside. The currency seems to be stuck at a 1.15 level versus the euro, and if the greenback starts to show weakness against the euro it could potentially open the door to a significant rally.
Not only could the dollar play a big role in any reversal, but the geopolitical scene could still be viewed as being bullish for the metal. The last few weeks have seemingly been far quieter, yet under the surface there are significant differences over trade and other issues that remain. Just because they haven’t been at the top of the headlines in recent weeks does not mean they have simply “gone away.” The potential powder keg of geopolitical issues could light the fuse to sharply higher gold at any time, and the market could potentially springboard off of current levels to sharply higher prices by the fall.
It is also important to keep an eye on stocks and risk assets. While the market appears to be strong, a recent glimpse at market breadth shows fewer and fewer stocks carrying the load higher for the market. While stocks may have a little left in the tank, the warning bells are starting to ring louder and louder.
Given all of the potential issues that could come into focus in the months ahead, now may be the ideal time to add diversification with alternative asset classes. Given many of the challenges currently being seen, gold should be at the top of the list.
As the stock bull market and economic expansion near the end of what is likely the final leg up, gold could potentially be getting ready to embark on a multiyear protracted bull market. Not only that, but the metal could also potentially provide a meaningful hedge against numerous other issues such as accelerating inflation and a possible major reversal in the dollar.
Adding this key asset class to your portfolio has never been easier. Simply pick up the phone and speak with an Advantage Gold account executive to discuss the potential benefits of gold ownership. Our associates are here to answer any questions you may have, and can even show you how to use the power of an IRA account to make the most of an investment in gold.
Don’t wait for the next major economic or geopolitical shoe to drop. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, dollar, gold, market rally, trading doldrums