Stocks finished the day after Thanksgiving moderately lower. Gold, on the other hand, finished the day with strength, up nearly $9 per ounce on the session. Of course, lower stocks and higher gold could be due to a wide variety of reasons. The day could, however, be indicative of trends to come.
The day’s upside in gold puts a little distance between the market and chart support in the $1450 area. Another dip towards $1450 could, however, see further buying interest and perhaps even a major reversal in gold’s recent trend lower. The yellow metal has been trending lower for the last several weeks now, after failing to revert to previous upside pressure that took prices well above the $1500 level, albeit briefly. For those paying attention, any significant dip in the price of gold could be very welcome opportunities to add more gold to their portfolios. There are several catalysts that could take the gold market sharply higher in the years ahead.
Here are three reasons that a large allocation in gold may be useful ahead:
- The global economy could be near another recession: Key economic data in recent months has shown a clear trend lower towards weakness. The U.S. and China, the globe’s first and second-largest economies, have both shown signs of weakness that could spell economic trouble ahead. The next global recession would not surprise many, given the length of the recent expansion and stock bull market.
- Central banks are easing again: The U.S. Fed recently lowered its Fed Funds rate for the third consecutive time in a short overall period. Other global central banks have acted in a more aggressive manner, quickly cutting interest rates in order to try to boost growth. If central banks continue to cut further, it may not be long until fresh rounds of QE are seen. Ultra-low rates and QE not only add to sovereign debt but may also weaken hard currency values.
- Debt: Global debt levels are not sustainable, at least not for the long-term. The U.S. remains under a heavy debt burden, and fresh QE measures could make that debt even worse in the years ahead. At some point, the debt will have to be dealt with. Barring any fresh solutions, the only way to potentially handle the rising debt levels could be a currency debasement.
Of course, there are numerous other factors that could also potentially play a major role.
The end of the current equity bull market could lead to capital looking for alternatives. A Trump impeachment or election loss could lead to the same. The ongoing U.S./China trade war, if it continues, could also lead to risk aversion, lower equities and even recession.
Whatever the actual catalysts may be, the gold market could cover a lot of upside in the months and years ahead. As the only real form of money there is, gold could stand to see strong upside as further QE and borrowing reduces the value of fiat currencies. Not only that, but many governments could have little or no choice but to debase their currencies if debts rise further. Some might suggest that the writing is on the wall. It is up to you, therefore, to act.
Building a significant allocation in gold has never been easier, and perhaps never more important. 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 answer any questions you may have and can even show you how simply it is to build a strong allocation in gold using an IRA account.
Don’t wait for the next major stock market collapse or for gold to take off without you before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: debt burden, economic data, global economy, portfolio opportunities, Thanksgiving, trends to come, upside pressure