The crude oil market has been working its way back higher for some time now. Nymex crude is trading for over $70 per barrel, the highest level since 2014. Brent crude has its eyes on the $76 level.
The oil trade could, however, see some exploding volatility in the days and weeks ahead. President Trump has announced that he will make a decision on the Iran nuclear deal made in 2015 this week. Although many have urged the President to remain in the deal, the consensus seems to be that he will likely walk away from it.
This would put previous sanctions on Iran back in place, thus limiting the nation’s oil exports. The sanctions would take a decent amount of oil off the market, and could potentially have a significant impact on global crude oil prices.
Higher oil is an indication of rising inflationary pressures. As the most heavily commodity on the planet, stronger oil prices can have a significant impact on the entire commodity sector. Oil is often referred to as the “leader” of the commodity space, and recent market action would seem to suggest that the oil market is just getting started.
Crude oil is not the only commodity moving higher, either. Grains such as wheat and corn have also been on the move. Key commodity indexes have been trending higher, and one could conclude that commodities are on the verge of a significant market cycle higher.
A commodity bull market could last several years or longer, and could gain traction just as the equity bull market finds a long-term top and as interest rates begin a slow, steady climb higher. A significant asset rotation is already taking place, and those that don’t see the writing on the wall could not only end up leaving money on the table, but could also end up giving money back in a stock market reversal and through inflationary erosion.
Commodity prices have a positive correlation with increasing inflation, accelerated economic growth and tighter monetary policy. That being said, now is the time to not only consider a significant allocation in commodities but to also consider what commodity may provide the most effective hedge against higher inflation. Gold should be at the top of the list.
Physical gold has been considered a reliable store of wealth and value for centuries, and is widely regarded as an effective hedge against inflation and weaker currency values. This asset class stands to benefit greatly from the impending commodity bull market and rising inflation expectations.
Adding it to your portfolio has never been easier than it is today. Speak with an Advantage Gold account executive today about the potential benefits of gold ownership. Our associates are here to answer any questions you may have, and can even show you how to build a significant allocation in gold using your IRA account.
Don’t wait for the next major stock market collapse or for hyperinflation to take hold before taking action. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, commodity, gold, inflation, iran, iran deal, oil, trump