Gold price rises again amid European election fears
Investors are holding off in the eurozone as the hotly contested French election draws near. This is proving a boon for the gold price as the National Front leader Marine Le Pen, who is a vocal economic protectionist and eurosceptic, asserts a strong position in the race.
Bullionvault reported that ‘gold prices rose to $1240 per ounce in London on Wednesday, regaining almost half of their post-US election slump as Euro stock markets slipped and government bond prices rose amid fresh fears over the currency union’s 2017 political outlook’.
On the continent it was also noted that the gold price added 2.7% for the week so far, gaining 8% from late 2016’s low.
Aside from the protectionist stance of her party, Marine Le Pen has repeatedly called for a referendum on France’s membership of the European Union – known as ‘Frexit’. Stephen Davies of the Institute of Economic affairs has noted that around 65% of the French want to exit the EU, and with France removed as a key player the future of the Eurozone and the EU itself would look increasingly bleak.
Aside from France, Bullionvault also noted that in Italy ‘the anti-establishment 5-Star Movement is polling neck-and-neck with the ruling PD Party ahead of this year’s national elections, while the 3rd largest party, the right-wing Northern League, is calling for ‘Italexit’ from the European Union entirely.’
Political uncertainty was also reflected in European currency markets, with the Euro having ‘choppy trade’, according to The Telegraph, which also commented that the gold price has risen for five consecutive days. Fiona Cincotta, of City Index, was cited as saying that gold breaking $1,300 is a ‘real possibility’.
In mining news Goldcorp announced yesterday its acquisition of New Gold’s 4% gold stream on the El Morro project in Chile for the price of $65m, as reported by mining.com.
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