The gold market has seen significant buying interest in recent weeks and appears poised for further upside. The market has seen an improving technical posture that, combined with current fundamentals, could see prices challenge previous all-time highs around $2000 per-ounce in the months ahead. Not only could the market retest those previous highs, but it could potentially move well beyond into uncharted territory. $3000, $5000, even $10,000 per-ounce or more are all distinct possibilities.
In the near-term, there are three primary factors that may fuel new all-time highs in the yellow metal.
- The need for diversification: Investors are still heavy stocks and will likely remain heavy in equities until it’s too late. The stock market has been moving higher for a decade now, and regardless of what the Fed does or does not do, it will come crashing down at some point like a deck of cards. Some investors appear to recognize this and have already begun to diversify with alternative assets like gold. Once the stampede style exit from stocks gets going, hard assets like gold may see significant inflows.
- Central bank action: Global central banks also appear to see the writing on the wall and have taken an increasingly dovish tone in recent months. Markets are pricing in a July rate cut from the Fed, and some analysts have suggested that the Fed will embark on a series of cuts. With little to work with this time around on interest rates, the central bank may even be forced to initiate a fresh round of QE. The notion of lower rates and/or QE may pressure the dollar, making gold more attractive in the process. Not only that, but investors may turn to gold as a hedge against dollar weakness and a corresponding decline in purchasing power.
- Geopolitical risks: There are an increasing amount of geopolitical risks that need to be addressed. The ongoing trade war with China, tensions with Iran and North Korean nuclear ambitions all present significant challenges. The current war on trade is already having a significant impact on the global economy, and lack of an agreement in the weeks and months ahead could put the global economy into recession. Iran and North Korea carry the risk of escalation, including military action. Markets would not likely take kindly to Iran trying to halt the flow of oil through the Strait of Hormuz or North Korea getting closer to nuclear capabilities.
Although these are some of the issues that may affect gold prices in the near-term, the market also stands to benefit from additional factors.
The potential for further dollar weakness and the next major bear market in stocks may keep the metal on the offensive.
With the long-term potential for gold to reach new all-time highs and to hit $5,000, $10,000, even $25,000 per-ounce or higher, now is the time to get involved. Adding this key asset class to your portfolio has never been easier and never more important.
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 using an IRA account.
Don’t wait for the next major global recession to take hold or for the next major stock market meltdown before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: central bank action, diversification, geopolitical risks, gold market, gold prices, market posture, portfolio diversification