The gold market, is often the case, has numerous, major implications working both for and against it. To start the new trading week, the market is having to grapple with fresh all-time highs in stocks.
It’s really no surprise that fresh equity all-time highs might act as a downward pressure on gold and other hard asset prices. Investors are drinking the Kool-Aid currently, and word that “Phase 1” of a U.S./China trade deal is almost ready for signatures is playing with people’s emotions. Despite the potential news of a deal getting closer, however, there are numerous key issues that remain in place that could not only prevent an actual deal from being framed but could also act as heavy upside resistance even if a deal is agreed upon.
The ongoing war on trade, which has been going on for well over a full year now, has already had some measurable effects on the globe’s first and second-largest economies.
The timing of a deal may be of particular interest to the anti-Trump crowd as well, who will almost certainly question the validity of any deal heading into major campaign territory ahead of the next U.S. Presidential Election in 2020.
The bottom line may simply be that with or without a deal, the global economy is headed back into recession. Although central bank actions along with a deal on trade may possibly avoid a recession, much of the damage has already been inflicted and there may be little, if anything, that central banks can do to stop the next major wave of economic slowdown that could be headed closer every single day. After a solid decade of growth and higher stocks, markets may need-or even require- a period of lower prices or selling before making a sustainable move higher again. That’s just how markets work sometimes, whether investors like it or not.
Against the backdrop of rising economic risks, global central banks must also try to address the increasing amount of geopolitical risks to the global marketplace.
The recent attack on Saudi Arabian oil facilities, for example, could potentially serve as an important reminder just how vulnerable the global economy really may be if someone wants to attack it. Although the effects of that attack were largely null, a larger or more-heavily coordinated attack could potentially spell major trouble for the global economy and energy mechanisms.
Whether the globe does enter recession again, or not, is irrelevant at this point. The global economy is already showing symptoms of a significant slowdown, and the current slowdown could get worse if the right actions are not taken by the appropriate powers-and quickly. To put it simply, it doesn’t really matter all that much if the global growth rate goes to .2, .1 or even 0 or -.1 or -.2. Either way, growth will have abated significantly, and investors will be on the lookout for alternatives.
The gold market could stand to see significant benefit from a global recession but may also see strong upside if the global economy simply slows further. It doesn’t have to be an all-or-nothing arrangement. With a seemingly deteriorating economic and geopolitical landscape, that could make right now the ideal time to build a significant allocation in physical gold. Doing so has never been easier, and arguably never more important.
Speak with an Advantage Gold account executive today about the potential benefits of gold ownership and to learn more about the key role it may play going forward. Our associates are here to answer any questions you may have and can even how you how to build a significant allocation using an IRA account.
Don’t wait for the next major stock market collapse or for gold to take off without you. Explore your potions for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: central bank, downward pressure, global economy, new deal potential, new trading week, presidential election, trade war