While a variety of factors constantly drive the price of gold up or down, political events seem to have the most profound impact across the board. Investing in gold is tricky since timing is critical to making a successful trade. The upcoming European election is one of the main reasons why gold investors are already looking ahead to 2017 in order to prepare to make the right move at the right time. What impact will the elections in Europe really have on gold trading? Continue reading to find out.
Political Turmoil Increases Gold Prices
With France, Germany, the Netherlands and maybe Italy having elections in 2017, political and economic turmoil is likely to unfold in some form or fashion. Any time there is any sort of instability in an economy, or even the perception of instability, people turn to making a gold investment. The fear of losing money to the stock market or other avenues can become too much for investors, so they turn to the safe option of investing in gold instead.
Impact of Brexit
When the Brexit vote occurred earlier in 2016, gold prices soared as people felt gold investment was the safest route. People who were never even interested in gold trading before started quickly learning about it, because they feared for the stability of their other investments. This situation is similar to the United States election, where people make snap decisions based on what could possibly happen. This just goes to show how much the political world plays a large role for gold trading.
How the US Elections Relate to the European Elections
When Donald Trump won the United States presidential election, gold prices soared significantly after being stable for some time. When you combine the Brexit worries with the potential instability of a political change in Europe, it signals a potential spike in gold prices in the very near future.
Major political events will almost always have a significant impact on the price of precious metals. The European election is something all people with a gold investment will be paying close attention to. If you have any questions or need any additional resources to help you decide what action to take next with your investment, be sure to visit our website and sign up for a live trading or demo account today.