The gold market is working hard today to recover some of yesterday’s declines. Oddly enough, the yellow metal is stronger even as stocks are also moving mostly sideways today. Although this may come as a significant surprise to many, it really shouldn’t.
The gold market could very well move higher along with stocks in the weeks and months ahead. The U.S. Fed recently suggested that it would not look to hike rates again until there is a pickup in inflationary pressures. The central bank has thus far failed to fuel any significant inflation over the last decade or so, and there is simply no reason to believe that inflation is likely to just take off in the months or years ahead.
Although the Fed could potentially avoid cutting rates further or taking other stimulation measures, the central bank seems to be fairly open on its plans for further hikes which seem quite unlikely anytime soon. This could potentially keep gold and other hard asset prices moving higher, even if stocks also continue to make fresh all-time highs.
Despite what the Fed does or doesn’t do in the months ahead, and regardless of what stocks may or may not accomplish, the gold market could remain very well supported by the notion of ongoing low rates and central bank easing. Of course, stocks and gold are not likely to move higher together indefinitely, and at some point, the levee will break. Once it does, that could be the signal that gold is going higher and stocks are going to enter the next major bear market. Whether it happens next week, next month of next year doesn’t matter, the only thing that matters is if that scenario does in fact play out. If it does, gold could find itself back at all-time highs or even far beyond while stocks could potentially see declines of 50 percent or even more. The big picture is bullish.
From a risk versus reward standpoint, the choice at current levels seems to be clear: Gold could have far more upside from recent levels compared to equities. Not only that, but gold may be less likely to see any significant declines as well. The ongoing era of easy money, geopolitical issues, aging bull market and economic expansion and the potential for a sharply weaker dollar could all keep the yellow metal on the offensive for the next several years or longer.
If stocks do start to really crack, much of the capital currently invested in equity markets could also find its way into the gold market, adding further upside price pressure. There may simply be no easy way to lose money in gold around current levels. That makes now, right now, the ideal time to build a significant allocation in gold. Doing so has never been easier, and perhaps never more important.
Just pick up the phone and 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 show you how to build a sizable allocation using an IRA account.
Don’t wait for the next major global recession to take hold, driving sharp declines in stocks before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: central bank, easing, gold market, stimulation measures, the fed