The gold market remains relatively quiet in recent action as the metal tries to hold support around the $1200 level. The bulls have not had much to cheer about in recent weeks, as higher stocks and a stronger dollar have taken a toll on sentiment.
When it comes to financial markets, however, things can and do change in a hurry. That said, there are two potential events on the horizon that have the potential to drastically change the outlook for not only gold but other markets as well.
Midterm Elections: The November midterm elections are quickly approaching, and there is a string chance the democrats could take control of the House in November. Regardless of what side of the aisle you may lean towards, this could potentially create a major political log jam that could make it extremely challenging for the Trump Administration to implement its agenda. Such a scenario could potentially cause a major shakeup in stocks and risk assets, and could send volatility to levels not seen in a long time. Not only could stocks see major declines, but the dollar could also see a significant decline as well. Weaker stocks and/or a weaker dollar both have the potential to fuel major buying in gold and other perceived safe have asset classes.
Trade War Escalation: President Trump recently announced further tariffs on $200 billion of Chinese goods. The initial 10% tariff is set to increase to 25% at the end of the year. China has already said it plans on responding, and thus far the two sides appear to be very far apart from any type of workable deal. This begs the question of what happens if China decides to use the nuclear option. This option could involve massive tariffs on materials used by U.S. manufacturers. Such a move could drastically disrupt the U.S. supply chain, and has the potential to send prices for numerous goods skyrocketing. Although such drastic measures are highly unlikely, a lack of progress on trade could eventually lead to such a scenario and must be considered.
The potential for some serious volatility and carnage in global financial markets appears to be rising rapidly, and now is the time to take action before things start to get dicey. Gold is an asset class that could potentially see massive inflows in either scenario, as weaker stocks and a weaker dollar could send panicked investors into the best alternatives they can find.
With prices currently trading around the $1200 level, gold could represent an excellent long-term value.
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 today about the numerous potential benefits that gold may offer. Our associates are here to answer any questions you may have, and can even show you how easy it is to build an allocation in this important asset class using an IRA account.
Don’t wait for the next major stock market collapse or financial crisis before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, china, gold, midterm elections, tariffs, trade war escalation, trump administration