Gains seen in gold price for fourths session in a row
Even though the trading was a bit choppy, gold came out with gains, which was nice to see after some recent drops in price and shaky overall performance.
Everyone is awaiting the outcome of this weekend’s Greek elections, as the final outcome will have a lot to do with what the price of gold does in the future.
Spot gold was up 0.2 percent to come in at $1,620.50 an ounce at earlier today, while U.S. gold futures for August delivery were up $2.10 an ounce to come in at $1,621.50.
As you can see there were relatively nice gains all around. Many thought that the price of the yellow metal would take a tumble heading into this weekend.
Thankfully this wasn’t the case and many including myself were pleased to see the gains, no matter how small.
The election this coming weekend in Greece will pit two sides against one another.
Both sides have very contrasting views as to what they think should be done for the future.
There is the relatively conservative New Democracy party, which wants to (supposedly) soften the bailout’s austerity measures without risking an open clash with Europe. There is also the Syriza, led by Alexis Tsipras, which Richard Cottrell has written extensively about for End the Lie.
Syriza wants to ditch the deal with the European Union and International Monetary Fund.
As you can see, the two sides are very far apart on almost everything so the election will have a huge affect on the future of Greece and the eurozone as a whole.
“The result of the vote will be very important not just to gold but across the whole financial markets next week,” RBS analyst Nikos Kavalis said. “If we get a disappointment, we can expect a massive sell-off across the board.
“(But) if we get a good result we won’t necessarily have a massive rally, simply because people aren’t necessarily convinced that even if we have a pro-austerity coalition, we are in any way out of the woods.”
There is a lot riding on this election. There was a bailout plan in place a few months ago, but it never seemed like Greece was entirely on board with it.
Even so the bailout went through, but in reality it only extended the inevitable and was only a temporary fix for the problem.
Some have likened it to giving a blood transfusion to someone with a gaping wound which is gushing blood. In one end and out the other, as it were.
Gold markets and other financial markets around the world will be paying close attention to what happens this weekend.
We could see a major sell off initially, or we could see not much of anything.
It will be interesting to see how the markets react to the election, especially if Syriza wins, which some have said is looking increasingly likely.
The above article is for informational purposes only and is not a solicitation by End the Lie or Goldco Direct. It is the commentator’s opinion only and not intended for investment recommendations, and does not necessarily reflect the views of End the Lie or Goldco Direct. Any references to outside sources are believed to be accurate. Past performance is not a guarantee of future results. All commodities involve risk. Investors should consult their financial adviser before making any investment decisions.