The gold market has been quiet as a lack of any fresh, bullish catalysts combined with low summer trading volumes takes a toll. Despite higher stocks, a stronger dollar and a robust appetite for risk, however, the yellow metal could potentially find a bottom any time now.
Although current market dynamics may not be seen as being bullish for gold, those very dynamics that are currently weighing on gold could potentially change, and change quickly. Underneath all of the current economic optimism, risk appetite and overstretched stock valuations lies numerous issues that have the potential to rock global financial markets.
Although investors have been focused on the potential for a global trade war, and have been particularly concerned with China, the resumption of sanctions against Iran could potentially pose a whole other set of problems.
President Trump has elected to reinstate sanctions against Iran that were previously lifted by the Obama administration as part of the nuclear agreement with the nation. Now that the U.S. has pulled out of that agreement, sanctions are due to kick in again this week, followed by further sanctions against Iran’s oil sector that are to take place in November.
The rhetoric in recent weeks has been tough-to say the least-coming from both sides of the conflict. Iran’s currency has been in a sharp freefall, and it has been reported that Iranians have been purchasing gold as fear of an economic meltdown takes hold. The potential for an economic collapse in the nation has also led to protests in several cities, and tensions are running high.
Although any action taken by Iran could have very minimal effects on the U.S., the lack of oil imports from the nation has the potential, according to some analysts, to push oil prices well into the 80s and possibly into the 90s. A drastic rise in the price of crude is not only highly inflationary, but could also push the U.S. into recession.
The potential recession risk that comes with higher crude is on top of the already-increasing recession risks of rising rates, full employment and trade issues. Higher crude could very well be the catalyst for the next major recession, which some have suggested could be much longer and deeper than the last. Not only that, but the Fed will have less tools at its disposal this time around to fight it.
All of these issues, along with an aging bull market in stocks and an economic expansion that is likely in its final leg, could point to recession coming sooner rather than later. The time to prepare for the next recession is now.
With prices well off their all-time highs, and with its potential to hedge against inflation and a weaker dollar, gold may be the most important asset class in the current environment. The metal could represent and excellent long-term value for the patient investor, and could potentially see a protracted bull market get underway as stocks and the economy finally run out of gas.
Adding this key asset class to your portfolio has never been easier. Speak with an Advantage Gold account executive today about the numerous potential benefits of gold ownership. Our associates are here to answer any questions you may have, and can even show you how an IRA account may be the ideal vehicle in which to make such an investment.
Don’t wait for the next major stock market collapse or for the bull market in gold to get underway without you. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: advantage gold, china, gold, obama, recesssion, sanctions, trump