Is Gold Entering the Next Bull Market?
The Federal Reserve recently indicated that it might apply the brakes on its monetary tightening cycle in this calendar year, pushing the U.S. dollar into a slight downturn to begin the calendar year. As the U.S. dollar moved through the month of January and the Federal Reserve seemingly reversed their stance on interest rate hikes, it has resulted in an interesting turn for gold coins.
This movement for gold coins on the market has left many wondering where gold is entering the next bull market? The gold coin has not seen such a market value in quite some time, so it is important to review what it is and what impact the U.S. dollar could have on this calendar year.
What is a Bull Market?
A bull market is the state of a financial market in which a group of securities are rising or expected to rise. As prices of these securities both rise and fall during trading periods – whether in days, weeks, months, or years – the term “bull market” is reserved for extended periods of security rises. These are typically periods that last for multiple months.
The relationship between the U.S. dollar and gold coins is nothing but intriguing, as they historically have had an inverse relationship in the market. For many experts, gold coins are the “one to watch” in 2019.
There is market volatility as we begin 2019, with many fingers pointing at the Federal Reserve. As Americans entered 2019, the Federal Reserve had already increased interest rates four times during the previous calendar year, though the aforementioned reference to applying the brakes on monetary tightening has indicated that the Fed might be changing its stance on such hikes.
What does the Federal Reserve have to do with the U.S. Dollar?
The Federal Reserve is an entity that handles monetary policy in the United States and is not to take orders or direction from any other entity, including the United States government. The president cannot step in and tell the Federal Reserve chairman what to do with monetary policy or interest rates, for example. In recent years, however, this has all become a topic of extreme skepticism, and many people believe that the Federal Reserve is, in fact, taking directives from Wall Street and Capitol Hill. This leaves uncertainty and skepticism regarding the Federal Reserve and, by extension, the U.S. dollar.
During times of fear or political unrest, the price of the historic metal might offer a barometer in terms of global and political well-being. That is not to say that a bull market is certain. Nothing in life is promised or certain, after all, though it is worthwhile to take note of the potential future of gold coins in the market as it relates to one’s personal portfolio. With this in mind and the possibility of an upcoming bull market, you might consider expanding your horizons to include a coin option like gold in 2019.