Certified Gold Coins After the Greek and French Elections Posted by James Randolph on May 07, 2012
Certified gold coins are most likely to post a rebound in safe-haven asset buying after this weekend’s elections in Greek and France. The results of the elections display the current dissatisfaction with the policies and governments that have been mitigating the European sovereign debt disaster. While gold has been relatively slow lately, the demand that dropped off during good economic data reports will most likely resume after these elections.
The austerity measures that hit Greece over the past two years are literally egregious. Grecians who had already retired and were living on the fixed income of their pensions faced a more than 50 percent cut in their income. Workers faced wage cuts as well. As the situation devolved in Greece and riots broke out in Athens, panic buying of gold over the uncertainty in the Greek government reached a fever pitch.
That panic buying increased demand for certified gold and gold coins to such an extent that we reached an all-time nominal high for the price of gold on September 6, 2011 of $1,923. We are currently in a consolidation phase and have yet to see gold reach that price level again, though most projections from reputable institutions place the price closer to $2,000 per troy ounce and even over towards the end of this year.
Both the elections in Greece and in France, which has similar balance sheet debt obligations but has not endured the embarrassment of austerity and international infamy, demonstrate a popular sentiment against the monetary and economic policies being enforced. Instead of alleviating the suffering experienced by the people in Europe, it seems the austerity measures and other policies have done so much public damage that citizens are voting out the powers responsible.
This is a very good indication that the relatively optimistic sentiment that lured investors away from gold will reverse, and the safe-haven asset status of gold will again be a major drawing feature for investors over the coming months. The politics of the problems in Europe are complicated, but the basic sentiment is clear. The people in Europe have no faith in the European Monetary Union themselves, and we should not either.
Certified gold coins are the best monetary policy we have in these days and times.