More investors have been turning to gold as a safe haven recently, boosting its price to over $1,400 per ounce. The reason? It stems from a convergence of three factors: a weaker dollar, lower bond yields, and rising tensions between the U.S. and Iran. For those who have invested in gold, the current climate represents increased profits in their precious metals portfolio.
On June 25, gold rose 1.3 percent in one day, bringing it to its highest point since April 2013. Since then, there has been a slight correction; however, the spot price still remains above $1,400. Meanwhile, the dollar has been losing its value. On that same day, the greenback dipped to a 3-month low. And, it’s well-known among savvy investors that a weaker dollar typically means a rise in the price of gold.
Bonds are also yielding less, primarily because the Fed has been threatening to cut interest rates in an attempt to improve the economy. With bonds paying less, gold is looking comparatively better as a long-term investment.
What’s happening between the U.S. and Iran is a major concern for anyone with money in the stock market or funds ready to invest. When the U.S. placed sanctions on Iran’s government and supreme leader, Iran responded with a flat statement that the diplomatic process is over. Iran’s next move could easily be to escalate the situation further, thus creating increased global tensions and instability.
These three factors have come together at the same time, prompting a return to gold for those who want to protect their financial assets and gain the most from them. There’s nothing playing out on the world stage that seems to indicate that any of these situations is going to change soon. That means gold is poised to do incredibly well over the next several months.
Although there’s been some resistance at $1,440 in the past, gold has certainly risen higher. At one point, it climbed to $1,480 before meeting resistance again. And, even though there may be short-term corrections at certain points, the overall outlook for gold is especially rosy right now.
At this point, it looks like the rally in gold prices still has more momentum. Some investors have taken profits because of the substantial increases in their portfolio values. Others are holding on for even better long-term gains.
While the outlook is positive, it always pays to seek advice from someone in the know about the gold market and the options it provides. The precious metals experts at GMRgold.com can help you make the decision that’s right for your portfolio and your situation. With the right investment strategy in place, you can take advantage of what’s happening in the world now and in the months ahead.