The gold market has seen quite a run higher in recent action in what could be the beginning stages of a major and protracted bull market. The market recently hit 6-year high and strong fundamentals as well as an improving technical posture could keep the metal on the offensive.
Markets do not typically go straight up or straight down, however, and now may be the ideal time to look at buying big on any dips.
The gold market is benefiting from several key economic and geopolitical issues, some of which are not likely to be resolved any time soon. These issues include:
The U.S./China trade war: The ongoing war on trade is having a significant effect on the economies of both countries. As the global economy slows further, a continuation of tariffs and other measures could put the globe’s first and second-largest economies into recession.
U.S./Iran tensions: The situation with Iran looks increasingly dangerous, and it has the potential to create a global oil shock. Two tankers were recently attacked in the region, and the Strait of Hormuz is a strategically critical choke point for oil that must remain open. Fresh U.S. sanctions may put further pressure on the nation to renegotiate its nuclear program, but thus far Iran seems resistant and military action cannot be ruled out.
Lower interest rates: The Fed has done quite the about-face in recent months, going from hawkish to increasingly dovish. The central bank kept rates steady at current levels at its most recent meeting, however, markets are pricing in a July rate cut and the potential for further cuts beyond that. The Fed recognizes the global slowdown and is likely also taking into account the trade war and other factors.
A weaker dollar: The dollar index recently hit a 3-month low and could be poised for further declines. The dollar may be seeing fading effects from both tax cuts and government spending. Lower interest rates may also weigh on the currency and the potential for another round of QE could send the greenback sharply lower.
Market dynamics are shifting, and the threat of a global recession seems to be on the rise.
That makes now the ideal time to add diversity with asset classes that may potentially outperform under such conditions. Gold should be at the top of your list. Not only does gold have significant upside price potential, but it may also provide a key hedge against rising inflation, a weaker dollar, lower stocks and geopolitical risks.
Adding this asset class to your portfolio has never been easier and perhaps never more important. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership and to learn more about the role it may play in the years and decades ahead. Our associates are here to answer any questions you may have and can even show you how to build a significant allocation using an IRA account.
Don’t wait for the next major stock market collapse or for the dollar to decline further before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: 6 year high, dollar index, dovish, global oil shock, global slowdown, Iran tensions, potential cuts, trade war, weaker dollar