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Crisis in the European Union and the future of precious metals

More and more countries from the European Union is starting to have problems, and this is something that more and more people who are interested in dealing with precious metal should take note of. The reason why people should take note of that is because of the fact that a lot of people are not turning away from the usual investments in stocks or gambling on currency, and they are actually switching to investment in precious metals, most notably gold, whose price is expected to rise on the winds of the economic troubles in Europe.

Even though media has been quieter recently when it comes to Greece, Ireland and Portugal, things are not going that great over there either, and the question is how long will there be before the next big crises hits the EU. Prospect of another Greece type situation that is looming over Europe is causing investors to once again start switching their investments away from economy and into precious metals, which are offering a lot more security, they are a lot less risky.

Recently we talked about the prospect of precious metals prices decreasing on the news that the economic situation of the world is improving. Since the Greek crises has been dialed down, the investors found more confidence in the European economy and have started to invest more in stocks, businesses but chances are good that due to the latest developments in previously mentioned countries, things will have a turn for the worse once again and that’s why platinum prices are already on the rise, while that of gold has stopped its downward trend and is not flatlining.

Maybe there’s a chance that crisis in Spain will not be as bad as that in Greece, since the situation is different, economy is stronger, just a few years ago Spain had budget surpluses, but in case that EU will be forced to bail out Spain, or do something similar to it, like it was done with Greece, and if after Spain Portugal starts suffering from the same symptoms, well then that could mean a rise in the prices of precious metals, all of them. For now the things are not bad enough to be causing more significant changes in prices, and our previous predictions of gold hitting the 1000$ low might still come true, but all this depends on how things play out in the EU. Bailing out of countries like Spain and Portugal would be a big strain on economies that are currently on the road to recovery like Germany and France which are responsible in part for the recent reports that the global economy is showing signs of slight recovery.

If those countries were hit with another burden, which will be considerably bigger than that of Greek bailout, then their economies will also experience a turn for the worse, they will show negative figures and once again precious metals will be the safe haven for investors. That means another price hike up. The only question which remains is when will the situation escalate for this to occur, maybe this will be the thing to cause gold to cross over the 2000$ per troy ounce mark, but that is predicted to happen at the end of the year, will by then gold go down? In any case if you are a precious metal investor, don’t make any major decisions for now, and see how things play out.

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