Precious Metals Will Soon Rise to the Top of this Investment Quagmire!

As emerging markets continue to struggle with ramifications created by new U.S. sanctions, a greater than usual influx of investment capital is finding its way into the “perceived” safe haven of dollar-dominated assets. Both gold and silver have dropped in value, caused not only by dollar strength, but also by the general perception that slowing international trade will reduce demand for industrial metals. If the tariff deadline with China is mitigated before Thursday, then a serious bounce in metal prices should be anticipated. If gold can recapture and hold the $1,197 level, investor interest will be regenerated. A break below $1,192 could suggest a retest of the $1,180 level, but such increased volatility guarantees greater risk as well.

There is a great deal of economic activity occurring simultaneously, making it difficult to sort through and identify whether or not we are experiencing a true low in precious metals. Is the coming adjustment the beginning of a broad uptrend or just a dead cat bounce, while prices continue to deflate? Last Thursday, President Trump told Bloomberg News that “We’re not being accommodated” by the Fed when it comes to trade disputes, then added, “That being said…I’m not sure the currency should be controlled by a politician.” So finally, we can agree. There is absolutely no doubt that when government controls a price, it inevitably creates a conflict.

The bond market is witnessing rising interest rates and a growing national debt, which provide a potentially lethal combination. The bond market is a seller’s market, because sellers have pricing power, which constantly provides upward pricing pressure and therefore keeps constant downward pressure on interest rates. The government loves this dynamic because both sides must lobby for their wishes. They must donate money, kiss rings, and whatever else is mandated by the powers that be.

Meanwhile, the media, the government, and banks (even though they’ve been buying themselves), have sequestered precious metals and verbally tossed them on the dung heap. But Barton Rothschild said it best, stating “Buy when there is blood in the street…even if it’s yours.” Bullish sentiment in the precious metals market is at an absurd low and the stock market is near an all-time high. I don’t believe there will ever be a more advantageous time, to capture high stock market profits and fortify physical precious metal holdings, which now have plenty of room to run. Such an opportunity doesn’t come often and shouldn’t be taken lightly. A September interest rate increase is already baked in to this cake, cancellation of the increase will cause a more than serious precious metals bounce and implementation of the increase at the end of the month will also provide impetus for an increase in value. During the interim, anything else is possible. Call American Bullion for professional and award-winning assistance at (800) 653-4653.

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