The gold market continues to languish below the psychologically key $1500 level. The market, while having several long-term significant bullish catalysts, seems to be lacking a fresh, short-term bullish force that could take prices beyond the $1500 level to stay. Given the last few weeks and gold’s lack of follow through, many investors may currently be asking:
“What’s the problem?”
In short, there does not appear to be any type of problem. Sometimes, good things simply take time. That’s all.
That is also why you should be looking at and considering buying as much gold as you can, even on further declines. Any additional downside could potentially prove to be nothing more than an opportunity to buy more gold on sale. The yellow metal is currently at levels that could potentially not be seen again if the market takes off (as we suspect it will). The market may very well be in the process of building a higher low, and recent lows could be the beginning point of the next major, multi year run higher in price.
What may keep the gold market running higher in the years ahead? Several issues have the potential to act as major, bullish catalysts for gold.
Of all the issues, however, a few major ones could lead the way. These potentially bullish catalysts include:
1. A Weaker Dollar: The dollar has been strong lately, but its days of strength may be running out. As the Federal Reserve gets ready for possibly more easing, the dollar could potentially see mounting downside pressure. Not only could an easing Fed drive bearish action in the greenback, but the ongoing move away from the dollar could also weigh heavily on the currency.
2. Global Recession: The ongoing global slowdown appears set to continue. Key areas of the economy, including manufacturing, have shown significant declines in recent months. As the global slowdown turns into a global recession, consumer spending is likely to take a significant decline. As it drops, the recession could potentially get increasingly worse, and lengthier. Unlike the last Great Financial Crisis of 2008/2009, the Fed and other central banks may have less ammunition to fight the slowdown this time around and could be forced to resort to additional QE or other alternative measures in order to try to keep the global economy afloat.
3. Ongoing Geopolitical Issues: The globe has seemingly seen an increase in protectionism and other geopolitical issues in recent years. That trend could continue. If it does, many nations could become increasingly anxious about dealing with the U.S., and more of them could look to move significant parts of their reserves away from U.S. Dollars. Not only would such a scenario add to issue #1 listed previously, but it could also fuel heightened safety buying in asset classes viewed as being safer than stocks or even bonds. This could potentially lead to higher inflows into gold and other alternative asset classes.
The three issues highlighted above are just three of many that could keep the gold market moving higher. Whatever the primary drivers of higher gold may be, we are still looking for the market to crack fresh all-time highs in the months ahead. Unlike stocks, or even dollars, the gold market carries no counterparty risk and is viewed by many as the ultimate source of money left on the planet. Forget price, it’s time to buy!
Adding physical gold to your portfolio has never been easier, and perhaps never more important. To get started, simply 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 in the years and decades ahead. Our associates are here to guide you and to answer any questions you may have. We can even show you how easy it is to build a significant allocation in gold using an IRA account.
Don’t wait for the next major global recession to send stocks sharply lower or for the gold market to take off without you. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: bullish catalysts, downside pressure, federal reserve, geopolitical issues, global recession, manufacturing decline, weaker dollar