Europe is a risky place for gold - HSBC

Research Team at HSBC, suggests that Europe faces political challenges that are likely to help drive gold prices.

Key Quotes

“Gold thrives on uncertainty and risk. The sovereign debt crisis is a good example. The debt crisis reached a peak in 2012 and took gold higher in its wake. Much of the concern in the Eurozone now centres on the EUR. According to the team the EUR appears even more exposed to political risk than it did in the sovereign debt crisis. Previously the risk to the single currency was confined to the peripheral, smaller economies. The risk in 2017 comes from the two economies at the core of the eurozone: France and Germany. Both countries are going to the polls in 2017. Given the unexpected success of populist platforms in the UK with Brexit and Donald Trump in the US, it appears that Marine Le Pen may stand a realistic chance in the French presidential elections in April and May next year. Ahead of the French elections is the Italian constitutional reform referendum on 4 December. This is increasingly seen as a broader barometer of support for the European ideal. There is enough risk in these political events to bolster gold we believe.”