All Eyes Are On This Weekend’s French Election April 21, 2017 If you read our comment on Wednesday, I indicated that we would have to hold the level of support in gold at the $1,278-$1,279 level in the June gold contract otherwise I believed that the anticipated Wall Street Gold traders stop loss levels would be triggered. And if you watched the action Wednesday in the June Gold Futures contract, that is what seemed to have happened. So much so that at that point the selling accelerated the price of gold to a new inter-day low in the June contract of $1,275.40. It seems as soon as the anticipated stops were filled, the market rebounded back to the $1,282 area. Today, it seems everyone is happy making a couple of dollars and now the traders I speak with will wait for the next opportunity to surface. To news over the pond: The International Monetary Fund is warning that when Brexit is finalized, it could have an unpredictable outcome, posing a risk to global financial stability. Wednesday, on an lopsided vote by British law makers, they agreed to hold snap elections on June 8th. This should give the UK’s Prime Minister Theresa May parliamentary support and gain more leverage to negotiate Britain’s withdrawal from the European community. The Prime Minister said, ”A general election is the best way to strengthen Britain’s hand in the negotiations ahead.” Watch out world, as the Washington Post reported on Wednesday, the French Communist party candidate Jean-luc Melenchon is gaining in the polls in the French election to be held this Sunday. What is so interesting is the fact that Mr. Melenchon, like his opponent Ms. Le Pen, is also in favor of France reclaiming her independence from the EU. Right now, he is in third place and very close in the polls to the gentleman in second place Mr. Emmanuel Macron. The question that is on everyone’s mind around the globe is, if both Ms. Le Pen and Mr. Melenchon come in one-two in Sunday’s French election, how will the financial markets and the commodity markets react come Monday morning? A trader I spoke with this morning said if they come in one–two he expects a selloff in the euro Sunday night and a rally in the dollar moving gold lower. As expected, no one candidate will win a majority so the two front runners will compete in a run-off election in May. Living here in the States, you might not think that this is big news, but globally this is a “very big deal.” Any more terrorist attacks like the one yesterday should help the front runner Ms. Le Pen gain more votes. Yesterday she indicated that if elected she will expel every suspected terrorist in France immediately. As reported in the Washington Post, some are in a panic state. Investors have begun frantically selling off French bonds, while the head of France’s largest trade union has decried what he described as Melenchon’s “rather totalitarian vision.” But thousands of others have responded with joy. According to the Washington Post nearly 25,000 people assembled in a predominantly middle class northern French city this past Wednesday evening to hear Melenchon. With his distinct wit, erudition and rhetorical flair, he charmed his crowd, that was packed inside and outside a local sports arena, waving communist banners, Palestinian flags and signs adorned with the Greek letter phi, the campaign’s official symbol. It seems as if every weekend of late has a big event on tap. Just last weekend all eyes were on North Korea’s holiday, “The Day of the Sun,” where their leader Kim Jung-un threatened the world with another Nuclear test. Luckily that didn’t happen. This weekend the world might not be as nervous as it was last weekend, but you can be sure all investors around the globe will be watching this election closely. One must believe that eventually any one of these stories coming to fruition can give the price of gold a huge boost. Have a wonderful Friday. Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. 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