Gold Nears Moment Of Truth: Will Physical Demand Come To The Rescue?

The U.S. dollar index has been on a tear in recent months, climbing 8.75% since July 1. While the dollar outlook is bullish, that in turn, has been weighing on gold. The gold market is nearing a so-called “moment of truth.” Will physical buyers step in to rescue the yellow metal near the $1,183-1,182 zone?

Historically, October has some of the ugliest memories for stock market investors. If the current U.S. bull market in stocks begins to turn into a bear, there is a traditional cycle which sees investors shift from paper assets (stocks, bonds) into hard assets (commodities, real estate). After all, if a paper investment goes bust, it always feels good to have something you can hold in your hand that has value.

There are many reasons that investors buy gold, as a portfolio diversifier, as an inflation hedge, as a currency hedge and as wealth preservation tool. Time is running out for the current U.S. bull market in stocks, gold continues to offer investors the peace of mind of a hard asset that you can hold.