Politics Once Again Influence Gold Prices
In what is becoming a well-worn tale, gold prices have jumped due to the continuing political troubles across the world, with the French election sending some investors toward the safe-haven commodity.
Gold prices hit $1,280 per ounce heading into the weekend of the French election.
With Marine Le Pen and the National Front party—an anti-EU, anti-immigrant far-right group—trailing in second place in opinion polls, investors are likely to use gold as a risk management asset in case Le Pen or another eurosceptic should emerge the victor on Sunday. (Source: “Security dominates French election after shooting,” Reuters, April 21, 2017.)
This weekend, however, only marks the first round of voting, with a run-off election taking place on May 7 between the top two candidates in Sunday’s results.
Opinion polls currently have centrist Emmanuel Macron in the lead with 24% of the first-round vote, while Le Pen trails with 21.5%. The other two major candidates have roughly 20% each.
Should Le Pen make it to the second round of voting, expect gold prices to jump.
Security is also a major concern in France, which suffered another extremist attack on Thursday. The attack took place on the famed Champs Élysées, where one police officer was killed and two others were wounded. ISIS has since claimed responsibility for the attack. (Source: “French police officer killed in shooting on Champs Élysées,” The Guardian, April 21, 2017.)
The security concerns leading up to the election just days after the killing has increased tension among voters, and may favor the National Front, which has taken a hard-line stance against Islamic extremism, often conflating it with immigration concerns.
Whatever the results are of this Sunday’s first round of voting in France, expect gold prices to be affected.