The last several months have unquestionably been challenging for the gold market. Higher stocks, a stronger dollar and overall robust appetite for risk have all played a role in the metal’s lack of upside.
Although it is unclear of the market has yet found a long-term bottom, recent price action would seem to suggest that a bottom is at hand, or very close. The market has been consolidating in recent days as it tries to hold the psychologically important $1200 level. The selling pressure appears to have abated, and perhaps the market has reached that point at which there is simply no one left to sell.
The longer the market continues to consolidate around current levels, the better off it may be. Strong, sustainable bull markets take time to develop, and the gold market is no different. For the patient, long-term investor, current price levels could potentially provide an excellent long-term value that may not be seen again.
Although it is difficult-if not impossible-to precisely time key market turning points, many of the factors that have kept a lid on gold for the last several months could be coming to a head in the months ahead. One of the most influential factors could be the Fed and the dollar.
The central bank is widely expected to hike rates again this month, and markets are also pricing in a very good likelihood of another hike before the end of the year. It is no secret that the markets prefer lower rates, and any missteps by the Fed could have significant consequences for stock investors. The central bank is in an extremely precarious position, as it looks to foster continued growth while managing accelerating inflation expectations.
The dollar could be significantly impacted by the Fed and its actions, and with rates not likely to go much higher during the current cycle, the greenback could potentially see a sharp reversal from recent strength. The combination of lower stocks and a weaker dollar could set the stage for a major, protracted bull market in gold that could see prices move back towards all-time highs or even well-beyond.
The longer the gold market consolidates and coils, the more significant an eventual upside breakout may be. Current market dynamics could simply be the calm before the storm, and the yellow metal could potentially set off on a sharp run higher, never seeing the $1200 per-ounce level again.
The time to get involved is not once the next recession hits, stocks tank or the dollar reverses lower. The time to get into the market is now.
Adding gold to your holdings has never been easier than now. 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 an IRA account.
Don’t wait for the next major stock market crash or for higher gold prices before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, central bank, Fed, gold, interest rate hike, selling pressure