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Asian market crushed today, sending Dow down over 350 points

Image of Asian Stock Market and Chinese Flag

An early market selloff in Asia has infected the U.S. markets as well, driving the Dow down over 350 points in early market trading.

“We see powerful arguments behind allocating to gold today, with geopolitical risk elevated and equity markets near all-time highs,” said a BlackRock report.

A just released report by BlackRock hit the wire on Monday, carrying a strong warning from the world’s biggest fund manager.  BlackRock analysts are concerned that this growth could take off too fast, sending inflation soaring. Or trade war hostilities could worsen into larger conflict.

“Should inflation rise faster than the US Fed raises rates this year, this would depress real rates and would be a material positive for gold,” they say.

Though BlackRock analysts see some life ahead for the U.S. dollar in the short term, they believe firmly that the dollar is buckled in for a long-term decline.

The report points to the possibility of three key risks today: sudden surging inflation, geopolitical turmoil and/or a market crash.

No wonder Blackrock ends their report with a reminder to all investors of a simple, time tested maxim: “Don’t abandon gold.”

FORBES: 5 REASONS GOLD IS ATTRACTIVE NOW

Forbes Magazine has kept a keen eye on the gold market for many years. This week, they took a look at the physical gold market once again and came up with a clear-headed analysis.

Here are Forbes’  top 4 findings about gold:

1.Gold tends to rise when the dollar falls
The U.S. dollar has been performing well of late, but many prominent analysts like BlackRock say the dollar must go lower when spiraling government debt reaches the breaking point. That benefits gold over the long term.

2.Gold is good to own in times of “market stress”
Forbes notes that during extreme times, like 2008-2009, there were periods when certain securities could literally not be sold. They had some value but there was no market for them. Gold is always easily tradable in good times and bad.

3.Gold’s natural volatility helps it diversify well against stocks and bonds
The Forbes report notes that gold’s daily price movement doesn’t tend to correlate with stock or bond changes. That makes it a strong diversification tool for retirement.

4.Adding gold can reduce overall portfolio volatility
Says Forbes, “Lower volatility is tantamount to lower risk.” That’s what every retirement investor should strive for. Your family’s future and your legacy are simply too important.

According to Forbes, all the veteran investors they interview tend to own gold for one of the following three reasons: “To help with portfolio diversification, or as a hedge against the declining value of paper money, or as insurance that you’ll always be able to raise cash by selling some of the metal.”

Do one of these scenarios apply to your and your retirement future?

THE GLOBAL TRADE WAR HAS BEGUN

A noted strategist expects gold will be finding sustained safe-haven interest from investors now trade war has broken out across the globe.

The U.S. administration just announced tariffs on $50 billion worth of Chinese imports. While this represents just a modest challenge, China replied quickly that it intends to retaliate in turn with more tariffs on U.S. goods.

“There is clearly a greater capacity for risk aversion, which for gold is a positive,” says John Kicklighter, chief currency strategist for DailyFX.

“Trade wars are a great level of uncertainty in the global spectrum,” he says. “Trade wars promote a global diminished capacity for growth.”

Oxford Economics just issued a similar report echoing Kicklighter’s remarks. Their financial models show that even just the early stages of trade conflict are already shaving 0.1 to 0.2 percentage points off of U.S. growth for the next year!

Kicklighter says that the lack of international cooperation only hurts everyone in the end, killing economic growth rather than protecting it. One clear beneficiary could be gold.

He thinks gold is attractive relative to other currencies and traditional assets.

“You have the collective depreciation of the U.S. dollar, the euro, the yen, the pound and more… that is where you are going to get motivation into the precious metal,” says Kicklighter.

GET AHEAD OF THE CRASH TO COME

As we often say here, “better to be a week early than a week late.”

There’s no more crushing blow to buy something at the “top of the market” and spend years watching it melt down.

Perhaps the stock market has more room to grow, even though valuations are sky high already. Are you ready to make that bet today?

We’re not market prognosticators here. Just realists.

When it comes to my family’s retirement, I always think “safety first.”

Do your research, and seek out safe-haven alternatives that can help cushion the blows, diversify and protect you when the rest of the market hits the skids.

Have questions?  It is easy to learn what you need to know to make a good decision about gold or opening a gold IRA.

Let us help you take that first step.

 

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