A little update on the state of the precious metals markets since Britain held their referendum on June 23,2016 . On that date the majority voted for the country to leave the EU (European Union). Which of course is a union of about 28 countries in the region who encourage trade and movement among the member states. But enough Mumbo, European jumbo! I’m not even sure what the means, anyways…
The point of this article is to update my customers and readers on how the precious metals market has performed since the brexit vote which served as a major trigger for metals prices over the past few weeks. (hopefully people actually read this, because I could be outside on a slip and slide right now. Does anyone remember those?)
Well in gold this is what happened:
Yup folks, that’s gold going up 60 USD in what seemed like about an hour after the result’s were announced. It topped out so far at $1364.90 on July 6th, an increase of $103.70 USD.
Does that look like the trajectory of a space x rocket? (space x is a private aerospace provider, they fly rockets) Nope that is silver up a whopping 16.88% since the Brexit announcement.
In closing out this update I want to go over some additional triggers going forward that could cause metal prices to explode further in the upwards direction.
– Other countries wanting to leave the European Union could cause panic and financial upset in the euro zone causing money to flood into safe haven assets like Gold & Silver.
– Continued Quantitative easing by the U.S Federal reserve, basically lowering interest rates to encourage banks to lend more money and increase the money supply (increase spending). This is normally good for metals prices because with low interest rates giving next to no return, a lot of people move money into metals for the opportunity of growing their money.
-Financial Crisis. Continued weakness in the U.S and Europe could trigger continued price increases for metals.
-Continued buying of gold by Countries like China in large amounts.
On the other, the absence of any of the above factors could lead to a decline in gold and silver prices. Below you can see the changes in the gold/silver ratio. A lot of people feel even though that ratio has closed substantially, silver is still looking undervalued compared to gold and could have more upside potential percentage wise in the future. Check it out…
That’s all I have for today. It will be interesting going forward over the next week’s and see what happens…
Disclaimer: I am not an investment advisor and nothing in this post should be taken as investment advice. Commodity prices can change suddenly and you could lose all your money. Be smart and take responsibility for your own choices.