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Back to August 2018

This week has seen a major change in the outlook for March of next year. It is unusual at this point, some seven months out, to be able to point that far forward and to such a particular date.

However, with the announcement from HM Government that there are papers issued with recommendations for a “No Deal Brexit” we must look forward and try and see what sort of effect this may have on the price direction of precious metals.

Uncertainty

We have often mentioned the word “uncertainty” in these columns before, and once again it will be that driving force which pushes the price of Gold and Silver. Whenever there is uncertainty in the market gold and silver prices start to jitter. The price reacts to the instability in the economies around the world, and in this case in particular - that on the 28th of March 2019 one set of rules apply to how we all do business with our colleagues around the world, and the very next day a whole new set of rules may apply. That seems as uncertain as it can possibly be.

Take in to account the GBP-USD rate “Cable” which will also be under tremendous pressure - not just on that date but on the days, weeks and months leading up to that date, then who knows what might happen?

A Turning Point for Trump?

At this point, please allow us some imaginative thinking to boot. President Trump has probably had his worst week since he took the Presidency. There has been a lot of time spent admonishing him for the things he has done and the things he has said, but it appears until now that many of the American public may have ignored this so far and just been happy that things economically have looked better in the US. The game has changed this week. With his closest advisor saying the President has basically broken the law, even if a sitting President can’t be charged, this does look like a turning point for Mr Trump. So, if we imagine that the November elections in the US turn out to be a victory for the Democrats (not an unlikely proposition), and the legislature turns Democrat, how long would it take for the Democrats to start impeachment proceedings against Mr Trump?

Let’s say after Christmas by the time the newly elected bodies get their fingers out.

The Future for Precious Metals

So, around the time we are fighting the uncertainty of Brexit, there could easily be impeachment proceedings against Mr Trump. I don’t think this is all outside the realms of possibility - although we understand we are in the realms of total speculation. Only time will tell, but I have a gut feeling that even if Brexit works in the end and even if Mr Trump manages to bluster his way through things, the period after Christmas and up until March will surely be a time where much uncertainty appears in all markets, and the price of gold and silver should react as it always does by punching upwards until things are more settled.

Historically, Julius Caesar was convinced he would survive everything until he decided his time was up, but he didn’t take any care to listen to “The Ides of March” and look what happened to him.

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This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.

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