Recent declines in the gold market have left investors wondering just how far the metal may fall before finding a bottom. Investors may not have to wonder much longer. The market could very well be at or near a long-term bottom, and price action over the next several days could be very telling.
A possible bottom in the gold market could come at an interesting time. Stocks have been seeing some increasing volatility and a potential top in equities could also be in the works. After trading around a 14-month high, the dollar index has backed off a bit. Behind the scenes, the ongoing war over global trade and numerous other geopolitical factors could finally be taking a significant toll on investor confidence.
In fact, the latest reading on consumer confidence according to the University of Michigan declined in the month of August to 95.3 from a July reading of 97.9. The reading was the lowest in 11 months.
A seemingly increasing number of analysts are calling for significant stock market declines in the months ahead, and the current geopolitical backdrop could set the stage for a sharp rise in volatility and a rapid decline in equity prices. The potential for a significant market fall seems to be on the rise, at a time when investors have become quite complacent.
Although the idea of trying to “buy the bottom and sell the top” is more often than not a fool’s errand, the argument can be made that gold at or around current levels could represent an excellent long-term value. This is in direct opposition to stocks at current levels, which could represent a poor long-term value given the aging bull market and what are arguably very overstretched valuations. From a risk/reward standpoint, stocks may have little to offer at current levels while gold could potentially see significant upside in the months and years ahead.
Not only does the potential upside in gold outweigh the potential upside in stocks at current levels, but gold may also offer investors numerous other potential benefits that stocks do not. Gold may potentially provide a meaningful hedge against rising inflation, a weaker dollar and geopolitical issues.
With the potential for a massive stock market meltdown and the next major recession coming sooner rather than later, now may be the ideal time to diversify your portfolio with alternative asset classes.
What better asset class than gold?
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 this key asset class using your IRA account.
Don’t wait for the next major recession to take hold or for the next major stock collapse to take a massive bite out of your portfolio. Explore your options for added diversification with gold today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, bull market, consumer confidence, gold, stock valuations, volatility