What an eye-catching chart for Gold this week. The price has fallen sharply from a high of £1,017 to currently £985 – a wonderful buying opportunity if there’s spare cash around.
The Stock Market is having a small rally so conversely the price of Gold tends to fall. This month I will be looking briefly at what may have caused this.
April’s Key Events in Regard to Gold and Silver
1. The French Elections
I suspect, but am not sure, that this may be a partial reaction to the French run-offs this month placing a centralist candidate in the French election on May 7th.
How Will This Affect the Price of Gold and Silver?
If the centrists are surprised, the financial debt and future of the eurozone will come even more sharply into focus. That uncertainty will undoubtedly rocket the price of Gold in the short term.
“As France is Europe’s second-largest economy and a critical piece of the EU puzzle, the implications of an anti-EU candidate winning are severe. As such, Gold’s Brexit move would likely be amplified” (Forbes) – referring to the 8% rise in the price of Gold following Brexit.
But I am not making predictions. France is very different to the U.K. and is more embedded in the Franco-German federalist roots of Europe, both historically and politically.
2. Greece: One for the Girls!
Very sad economic news out of Greece this month. These facts were very hidden but show the growing deficit of the eurozone beneath the headlines. Remember, the monthly review of the news is to highlight the background hum beneath the louder news. Here is one such fact that tells us so very much about the economic state of the eurozone and how it affects real lives:
“The implementation of the Greek pension reform of 2016 goes into effect this month, [leading] to the sudden death of incomes for widows, pushing a large portion of population further into poverty. Widows’ pensions will be cut down to 50% of the deceased’s pension and new more restrictive age-based criteria will go into effect.” (Zerohedge)
According to so-called Katrougalos Law, a widow is entitled to receive a pension for the rest of her life, if she was at least 55 years old at the time of the spouse’s death.
- If the surviving spouse was below this age, the pension is given initially for 3 years.
- Then it is interrupted and is granted again after the surviving spouse reaches the age of 67.
- If the age of 55 in not reached within 3 years the pension is cut and never granted again.
- The state keeps in its pockets all the pension contribution paid by the deceased.
It doesn’t stop there: “Pension rates in crisis-battered Greece are set for another round of reductions in 2019. The latest draft agreement between Athens and institutional creditors is forecast to lead to a weighted average decrease of up to [a further] 22 percent for currently allocated monthly pensions.” (Greek Tomos News)
Can we imagine something like that happening in the UK? How much safer would it have been to put that Money into Gold? Gold and Silver have always been a hedge against economic uncertainty. It is not unusual to expect there to be a fair deal of that over the coming months and to prepare wisely.
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