The gold market has been trending higher for the last few weeks, and in our view with good reason. Despite some higher equities and fresh all-time highs being made in stocks, a degree of risk aversion still remains in the marketplace. Of note is the fact that gold has been rising along with interest rates-could that potentially spell trouble for stocks?
Among a number of potential catalysts for higher gold prices, here are three that may potentially keep a floor under the yellow metal and could also possibly push prices significantly higher from current levels:
The Trump Factor: Without question, the new administration has drawn both praise and significant criticism. From the immigration ban to the very recent resignation of National Security Advisor Michael Flynn, there have been few dull moments since the new administration took over. Given the way things have gone thus far, we would expect more uncertainty surrounding the administration and its policies to potentially act as a nice tailwind for gold.
Rising Inflation: Inflationary pressures may be on the rise, as today’s Producer Price Index came in hotter than expected. The gauge showed a headline reading of .6 percent while consensus estimates were looking for a reading of .3 percent. Even stripping out the volatile food and energy sectors, the gauge rose .4 percent month-over-month while estimates were looking for a rise of just .2 percent. With inflation possibly finally beginning to accelerate, investors may potentially look to hard assets like physical gold for hedging purposes.
Recession and Stock Market Collapse: The U.S. economy has been growing, although that growth has been nothing to write home about. That being said, the economy may at some point slip back into recession. Should economic activity slow, investors may elect to cash in on stocks and look for alternatives. You may also want to consider the length of the current bull market in stocks: You could certainly make the argument that the move higher in equities is getting long in the tooth.
While the list of reasons to own gold could go on and on, the above are three reasons that right now may be a great time to begin an allocation in physical gold or to add to existing holdings.
If you’d like to own an asset that can potentially provide a meaningful hedge against rising inflation, geopolitical uncertainty, weaker currency values, lower equities and more, then you may want to consider physical gold and silver.
Adding these key metals to your holdings has never been easier than it is today. Speak with an Advantage Gold account executive today about the potential benefits of physical gold or silver ownership. Our associates are here to answer any questions you may have, and can even show you how to buy and hold these key precious metals using your IRA account.
Don’t wait for higher inflation to erode your purchasing power or for the next major stock market collapse before taking action. Explore your options for physical gold and silver ownership today. Call us at 1-800-341-8584 to get started.Tags: advantage gold, gold, immigration ban, political uncertainty, rising inflation, stock market collapse, trump