The gold market may have finally broken out of its recent trading range to the upside. Despite gold’s recent performance, however, there are still some investors that do not see its validity for portfolio inclusion. Below are five reasons to buy gold right now. Read them and think them over. We think afterwards you will agree.
Gold Remains Out Of Favor
It is hard to think of a more hated asset class than gold and precious metals. It seems everywhere you look, financial experts are telling you not buy it because it produces no income, has costs associated with it, etc. The funny thing about markets is that when assets are heavily disliked by many so-called “experts,” they have an uncanny tendency to rise. Also, try to think of any other asset that you can hold in your hand, or buy milk with or a gallon of gas.
Rates May Come Back Down Quickly
The Fed has been aggressive in its interest rate hiking scheme over the past year. Despite the fact that the Fed only raised rates by 50 rather than 75 points in December, it is likely to continue hiking rates through the first half of 2023. The Fed is already flirting with recession, however, and more hikes may only increase the chances that a recession takes hold. The Fed may very well find itself hiking rates further only to decide to start cutting them again right away. Rates are likely to be lower in 2024 than they are today.
The Era Of Negative Interest Rates May Spread Like A Virus
The ECB, the Bank of Japan and other central banks have all gone to negative interest rates in an attempt to stimulate growth through lending. This practice could spread into other nations, and those using this “tool” in the future could potentially go deeper and deeper into negative territory. This strategy has not been proven to work, and may carry with it some very serious economic risks that could potentially far outweigh any possible benefits. The idea of negative rates could cause depositors to look for other means to put capital to work, and much of that capital could potentially flow into gold and precious metals.
Gold Appears To Have Made A Long-Term Bottom
While we do not advocate the active trading of gold or precious metals, we do advocate buying low and selling high when possible. At current levels, gold could potentially represent a long-term bargain of epic proportions. Given the current economic backdrop and difficulties being faced by the global economy, gold prices have the potential to quickly move back to all-time highs over $2000 per ounce or even beyond. Would you rather buy now at less than $1900 per ounce or wait for prices to hit $2000, $2500, or even $5000?
The Dollar May Have Limited Upside
The dollar had a great 2022 but is off to a tough start as 2023 gets going. The currency traded as high as 115 or so on the charts before seeing a steep decline, putting it where it stands currently around the 103 level. After rising significantly on the notion of higher interest rates, the dollar is likely to come back down to earth as the Fed’s rate hiking plans peter out and rates are eventually eased again. As the dollar declines, so does your wealth and purchasing power.
Gold is already being bought by investors for these reasons and more. Why wait?
Fortunately, buying and holding physical gold and silver has never been easier than it is today. In our view, gold represents an excellent value and bargain at current levels, but today’s prices are not likely to last. Explore your options now before prices rise. Speak with an Advantage Gold account executive and learn how physical gold or silver may play a role in your long-term investment strategy. Our professionals can even show you how to buy and hold physical precious metals within your IRA account to help safeguard your financial future.
Don’t wait for rates to go further into negative territory, or for the next stock market crash in which billions of investor value will be lost.