Gold has reacted positively to the post-election scenario. Gold markets usually perform effectively during post-election periods because of the new awareness and political balance. Shortly after the US election, European ministers held a crisis summit in order to save Greece from imminent default. No decisive solution has been found because overly weary financial institution countries are tired of maintaining the Greek economy on life support. Also, the Greek situation has a cancer-like effect on other Euro economies such as Italy, Spain and Portugal, which are also in a cycle of extremely dramatic and unhealthy events. Even France seems to be following the same path.
The French economy has slowed down dramatically. This means that it’s become harder for them to borrow from the global markets, which is a sign the country is on very fragile footing. Amid all of this turmoil in America and Europe, smart income investors are once again moving to gold. The environment of political deadlock in both the US and Europe leaves investor’s with a lack of confidence.
With investors losing confidence in the central banks, they prefer to keep their profits in gold as an asset which has a historical margin of safety. While many were glued to the US presidential elections, an equally important political election was happening in another part of the world: China. China has put in place brand-new leadership for the next ten years. Unlike America, where the political leadership is chosen every four years, the authority in China is chosen for the decade by the dominant Communist side. For the overall global economy, China has become the major country to experience the most growth since Europe and the US split.
2013 is looking very bullish from a macro-economic perspective. Europe is in a precarious situation which ensures that investors will keep buying gold. The United States will probably continue the economic policies that keep investors confident in gold. Meanwhile, China is signaling a domestic pro-growth agenda which means that actual purchases involving gold will continue unabated. With the political election season officially over, and the year coming to an end, gold is looking incredibly attractive & strong in 2013. A well-known US based company, Merit Financial, has never been a part of any fraud or ever been involved in any unfair practices in more than 26 years. This highly-respected company expects to see gold price escalation in the next 12 months.