Le Pen’s second place finish hurts the price of gold.
As soon as it was obvious that Le Pen was not going to win the first round of the French Presidential election, the price of gold took it on the chin. In the early evening here in the states, the CME Gold futures contract traded down $23.00 to an intraday low of $1,266.00.
Le Pen finished in second place behind a former investment banker and political novice Mr. Macron. This is a very untraditional outcome, as neither candidate came from the establishment parties that have been in power for decades.
Nonetheless, a second place finish gets her into a runoff in two weeks to see who will be the next President of France. According to the polls and the way the equity markets are reading the tea leaves this morning they are not giving her much of a chance of defeating Mr. Macron.
So now it looks like the European Community will stay together and just have to deal with the UK leaving. We will have to wait to see what the financial impact will be as the process develops.
This election was so much a part of the recent rally in the price of gold that even with the lower dollar this morning, gold seems to be in an offer mode down $17 dollars at the time of this report. I do expect the price to recover somewhat but for now the rally has lost all its momentum.
Back to our shores, U.S. news events that can impact the markets this week:
Will both parties come to an agreement later this week to fund the Government, or will the Democrats play hardball with the president? Healthcare seems to have zero impact on any market and everyone’s awaiting the big announcement on Wednesday promised by the President with his plan for tax cuts both corporate and individual. Equities around the globe are up nicely this morning and the Dow is up over 200 points on the opening. So one could expect the equities to get all the coverage this week unless some unexpected news hits the wires.
The next level of support in the gold is at $1,248.00 and silver at $17.52.
Have a wonderful Monday.
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