The gold market has without a doubt had a disappointing summer to say the least. The market has yet to build upon any rallies, and eager short-sellers have pounced on the opportunity to sell any moves higher. Things may be about to change, however.
The gold market is showing more signs of bottoming action, and although it is not yet clear if a bottom has been reached, the market could potentially see some fireworks in the weeks and months ahead.
There is certainly no shortage of issues currently being seen that have the potential to fuel a major reversal in the gold market. U.S. politics, a trade war with China and uncertainty over North Korea’s disarmament are all possible catalyst for higher prices. There is another issue, however, that could potentially put the gold market into a win-win situation: The decline of emerging markets.
News about Turkey and the declines in its currency have dominated much of the financial media in recent weeks. Turkey is not the only problem however. Issues in Italy, Brazil and South Africa-to name a few-could all also have a global impact. Although the dollar has seen much of the safe-haven inflows in recent months, that could change, and change in a hurry.
If emerging markets continue to stay under pressure, it becomes a global problem as opposed to a regional problem. Central banks may be forced to act, or not act, in order to try to maintain stability. Put another way, significant declines in emerging markets could force the Fed’s hand in terms of further rate hikes, and the central bank could find itself having to change its approach. This, in turn, could potentially pressure the dollar index.
With the greenback under pressure, it is a likely scenario that fresh safe-haven inflows could find their way into gold instead of the dollar. Not only would the notion of risk aversion potentially boost gold, but a weaker dollar could act as jet fuel, igniting a sharp and significant rally as shorts are forced to scramble. The current state of bearish sentiment in the gold market is such that not only might shorts get crushed, but the market could also benefit from a massive FOMO, or Fear Of Missing Out.
Such scenarios could potentially indicate that a bottom is at hand, or very near, and that current price levels could prove to be an excellent long-term bargain.
That makes now, right now, an ideal time to buy.
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, and how you can even harness the power of an IRA account to build a significant allocation in this key asset class.
Don’t wait for the next major stock market crash or for gold prices to take off without you. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, catalyst, china, fear of missing out, gold, north korea, turkey