IS GOLD ON THE VERGE OF A BREAKOUT?

As we have stated regularly for some time now, the global financial landscape appears to be headed for some significant changes. These changes may affect how investors look at various financial markets and may be the catalyst for a large shift in both investor allocation and sentiment.

What are some of the issues we are referring to?

There are several noteworthy issues in play right now that may significantly impact financial markets. Here we will briefly outline just a few, and discuss why these issues may be a bullish catalyst for gold.

Greece is extremely likely to default: At this point, much of the news surrounding Greece and its debt troubles is old news. While the country was granted a four month extension of its bailout, it has become increasingly clear that Greece cannot go on “as is.” The country did make two interest payments to the IMF recently, but has much larger payments coming due to the ECB. The country’s finance minister has openly stated that Greece will run out of cash within a matter of weeks. It certainly appears that the country has at this point exhausted its options. Needless to say, should Greece default it could ignite a global sell off in which safe haven assets such as gold may potentially benefit significantly.

Other nations are keeping the stimulus flowing: While there has been and likely will continue to be great discussion on the interest rate outlook in the U.S., the reality is that even if the fed begins the tightening process other nations are on a different course. China has recently lowered interest rates in an effort to boost its economy, while the ECB has said that it will remain accommodating for as long as necessary to boost economic activity in the European Union. While these are just two of several other countries taking similar measures, there is without question a global ‘disconnect” as to the path of interest rates. We believe that gold is likely to rise whether the fed hikes rates or not. If other nations are still providing stimulus, that may be a bullish underlying factor for gold. On the other hand, if rates begin to rise in the U.S. due to changes in inflation expectations, that could also be viewed as bullish for gold and precious metals.

Stocks are making new all time highs once again: Does anyone really think the fed driven rally in equities can continue much longer? The initial rate hike will mark the end of an era of low interest rates. While past performance is not necessarily indicative of future results, looking at the drops seen in equities in 2001 and again in 2008/2009, the market could potentially be set up for a massive drop- a drop that could potentially see the stock market drop by half…

The bull market may be wearing out its welcome, and when it does, investors will be scrambling to find alternative assets to put capital to work in. Assets like gold and silver…

While we do not advocate and are not in the business of trying to “trade” gold, we do believe that recent price action in the yellow metal is very telling. The market is always right…

After bottoming out in March just above the $1140 level, gold has maintained a sideways range for several months. The market has seen resistance around the $1220 level and has found support around the $1180 level. It looks as if that is about to change.

Gold has found willing buyers on dips for some time. These investors appear quite content to buy gold “on sale” and likely believe strongly in the metal’s longer-term prospects. Gold has likely been waiting for further clarification from the fed on the possible path of interest rates, but now appears ready to head higher regardless of what the fed does or does not do.

Should gold maintain trade above the recent resistance level around the $1220 area, it may set the stage for a quick rally back up to the $1300 level. A breach of this level on the upside, and gold could potentially be off to the races again.

The reality is that it doesn’t matter. Recent price action is simply noise in the grand scheme of things. Gold has maintained its long-term uptrend, a trend we see no reason not continuing.

What it does mean, however, is that now may prove to be one of the most opportune times to buy gold ever.

The market has spoken. Gold has held recent lows and has not embarked on another leg lower as so many “experts” have predicted. We believe that given gold’s bullish fundamentals, the market is gearing up for a large upside move. In addition, when risk aversion sets into the marketplace again-whether due to a Greek default, stock market sell off or otherwise- that risk aversion may help fuel the price of gold and other precious metals significantly higher.

Ask yourself: Do I want to buy gold when it’s less expensive or more expensive?

We believe the stock market is a ticking time bomb. Regardless of the possible catalyst, the market may be vulnerable to significant downside risks, and is at levels with increasingly diminishing returns.

The time to act is now…

Take the necessary steps to protect your portfolio now, before it’s too late. We believe this is an excellent time to consider gold, silver and other precious metals as they may provide protection during upcoming economic turmoil. We believe the gold market is on the verge of a major breakout and now is the time to get involved.

Don’t wait another day. Learn about gold and how it may reduce portfolio volatility, hedge against rising inflation and reduced purchasing power and provide unrivaled peace of mind.

Getting started with a gold IRA is easy. Our experienced executives are here to guide you, step by step, through the entire process. Call us today at 1-800-341-8584 to get started.