U.S. Stock Markets opened sharply lower on Tuesday, beginning what will likely be a third day in a row of massive losses, which have already erased more than $1 trillion in investor cash. Meanwhile, the Volatility Index, which market-watchers use to measure fear, is skyrocketing. Taken together, these are very strong signs that the exuberant Stock Market rally of recent months is over. At the same time, the value of cryptocurrencies like Bitcoin have fallen off a cliff, erasing months of gains in only a few days. After a decade long rally for the stock market, here is everything you need to know and how it affects Gold.
Sparked By What?
The historic drop of 666 at the closing bell, Friday the 2nd, was fueled by the report of wage data that pointed to the fear of quicking inflation rate driving prices for everyday things higher. Is this a correction or the big fall from a lofty 26,000 that the index was at since the start of the year? That 6% gain since the beginning of 2018 is looking too lofty to sustain. “The good news, is bad news,” says Donald Selkin, Chief Market Strategist at Newbridge Securities.
That, we don’t know, and we remain on the edge of our seats as all heads turn to the FED and the newly appointed Jerome H. Powell. He’ll have to very carefully consider a rate hike, weighing its effects on the stability of our economy.
So now as the stock market has lost it luster will investors turn to gold? We at the United States Gold Bureau think so. The precious metals market is not correlated to the stock market. Before this decline, cryptocurrencies were seen by some as the safe haven, but those currencies have seen a 60% drop along with the stock market slide. Since cryptocurrencies are no longer a valid option at the moment, all eyes turn to precious metals where there has already been a modest gain.
Many investors are wondering what they can to right now to protect their assets and set themselves up for long-term security and growth. With massive volatility and crashes in other markets, the price of gold has been quietly hiking upward, rising $30/oz just since the start of the year. This should come as no surprise to experienced investors who know that precious metals and stocks are non-correlated.
Diversify Your Precious Metals Now!
The answer is loud and clear – DIVERSIFY. The concept is simple and financial advisers have been screaming it for years: Don’t put all your eggs in one basket. If you’ve been on the fence, waiting for a sign, this Stock Market and Bitcoin crash is your canary in the coal mine. To diversify your portfolio and give yourself more solid footing for a secure financial future, consider reallocating a portion of your portfolio into gold, silver and rare coins. The right mix of these assets can help you to not only diversify INTO precious metals, but also WITHIN precious metals.