Investing In Gold And Silver Post Brexit

UK votes to leave the EU, sending gold and silver skyrocketing!

Friday, June 24, 2016

Brexit puzzle

Today is a huge day for the market, and it's not a good one. You know what that means... gold and silver prices are skyrocketing! The big movement in the market today is the result of the recent vote with regard to the UK leaving the EU. Today, we'll talk about the details of the Brexit vote, how the market is reacting to the news, and what we can expect to see from the prices of gold and silver moving forward. So, let's get right to it...

Britain Consumers Vote For A Brexit

For the past several months, if you've been watching financial markets, chances are that you've seen the word Brexit thrown around here and there. The concept behind the Brexit is actually relatively simple. You see, many politicians in the United Kingdom argued that the relationship between the UK and the EU was causing economic strain on their region. As a result, hey pushed to leave the EU.

On the other hand, there were plenty of politicians that argued that leaving the EU now would be a bad move. They agree that the economic strain the UK was feeling was in large part the result of their relationship with the EU. However, they also pointed out that leaving the EU would cause issues with global trade agreements that would lead to economic hardship.

As a result, the region left the decision up to the consumers. The vote was held yesterday, and the results came in this morning. According to the results, the British people have voted for an exit.

What Does This Have To Do With Gold And Silver?

While it may seem as though a Brexit and the prices of gold and silver are two completely unrelated topics, that notion couldn't be further from reality. The truth is that precious metals have long been looked at as safe-haven investments. This means that when market or economic conditions are in question, we can expect to see gains in precious metals as investors look to keep their money safe.

Well, look around? One look at the global market right now and your eyes may turn red. Everything is tanking on the vote, and for good reason. At this point, it's clear that the British people want to leave the EU. This means that soon, the UK will be forced to renegotiate global trade agreements. Not to mention that UK backing in the Eurozone is going to dissipate. As a result, economic conditions in the UK and in Europe are likely to falter. This alone would be enough to send the prices of gold and silver skyrocketing. However, it doesn't stop there.

Due to global trade, economies around the world are heavily dependent on one another. With two of the world's largest economies headed for hardships, global economic conditions are likely to see issues. This will lead to market concerns and further growth in the prices of gold and silver.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from gold and silver. The reality is that at the moment, there are more questions revolving around the global economy and global market than there are answers. As a result, we're likely to see big spikes in demand for precious metals, leading to massive gains in value.

What Do You Think?

Where do you think gold and silver are headed and why? Let us know your opinion in the comments below!

[Image Courtesy of Pixabay]

Joshua Rodriguez

Joshua Rodriguez is an avid financial professional. He is the owner and founder of CNA Finance, a partner at Modest Money, and a writer for US News & World Report, Investing.com, and more! Joshua takes a strong fundamental approach to market analysis and enjoys offering his take on what we can expect moving forward. You can reach Joshua at cnafinancehelp@gmail.com.