The gold market in Europe is making some interesting, yet predictable, moves.
Posted by Adam King on November 17, 2011
The European Gold Market a Sign of Things to Come
November 17, 2011 – The gold market in Europe is making some interesting, yet predictable, moves. This week the Prime Ministers of both Greece and Italy stepped down amid the financial turmoil engulfing the European Union. Greece’s Papandreou made his decision to resign just days after a confidence vote promised to keep him in office, signaling the depth and width of the fiscal crisis afflicting the country. Italy, its Mediterranean cousin, has largely avoided too much bad press concerning its internal debt problems, besides one or two banks, but it is well-known that Italy’s finances are very dependent on the Greek debt problem finding an equitable solution.
The reaction in the gold market, which we have been predicting for months, is just out today. European gold investment demand has surged 135% in Q3 this year. In response to the debt crisis, Europeans are going gold. This is a mathematical demonstration of how investors regard the debt crisis and what proactive steps they take in the market.
Back in spring when the first austerity measures were being imposed on Greece and riots in Athens made headlines, gold was inevitably set on a course to sky rocket to the summer high. The fundamentals are the instability of the economic situation, the policy of bankers, and bureaucratic political institutions that have as yet been unable to find a good outcome. These made for an advisedly safe venture into gold.
Now, looking back on it, the idea of investing in gold wasn’t just safe, it was smart. With the market up 135% in demand in three months alone, the predictable consequence of the European debt crisis and Greece’s toxic debt problem are coming to pass.
People are going to gold in droves. There is no way around the debt crisis but there are methods of preserving and growing one’s wealth through the debt crisis. The best of these ways is gold. Having an intrinsic value that makes it the historical store of wealth since the times of ancient Rome makes gold the ideal place to store your money.
As the crises in Europe continue to play out, it is understandable and predictable that more investors will be moving their funds into gold as an asset isolated from the debt problems interlacing the EU. The gold market will reply in kind to this significant rise in demand. For both the crisis and what we can predict will come from it, getting in gold now is a good strategy.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
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US Gold Market
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