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Updated 11:00 30/10/20

Top 5 reasons to buy gold now

By Samuel Gee, News Editor

07 Feb 2017

Gold and the yen, two of the world’s most trusted safe-haven assets, have spiked in the last week in response to the rising political tension that is gripping the globe. Demand for these assets tends to rise significantly when investors become nervous and the yellow metal has jumped by 4.9% (£+46.94/oz t) to a near three-month high in the last seven days.

With the current geopolitical climate showing few signs of subsiding, gold could be set for a sustained bull market in 2017.

Here are our top five reasons to buy gold right now…

1) Brexit

Demand for gold hit a four-year high in 2016, thanks largely to the result of the Brexit referendum in June. Britain's decision to leave the European Union saw the pound plummet and demand for gold soar. This decision will effect both Britain and the EU politically and economically and with many changes still to come, the uncertainty caused by the referendum is likely to continue.

2) President Trump is heading for trade war with China

Throughout his election campaign, Donald Trump signalled China as one of the USA's major obstacles to prosperity, claiming that its currency policy was a direct threat to the success of the American economy. Since his election Trump looks unlikely to retreat on his pledge to impose heavy tariffs on imports from China, a move that is likely to lead to a trade war between the two nations. As tensions rise between USA and China, global stability is being put under threat, increasing gold's appeal as an investment.

3) Iran testing missiles in response to Trump sanctions

Similarly, Trump's hostility towards Iran has added to global instability. His decision to reverse the warming of relations between USA and Iran through sanctions has resulted in Iran testing missiles and performing military exercises in what the Iranian military have called a direct response to the threats of the USA. With both

4) Eurosceptic Geert Wilders is favourite in the Dutch election

If Eurosceptic Geert Wilders continues the populist revolution taking place in Europe, the EU’s days could be numbered. His election would extend the global success of anti-globalist movements to mainland Europe and could increase the nationalist fervour that has been growing throughout the continent.

5) Political scandal in France is opening up the path for the far-right ahead of April's election

Should Wilders win, it would not be surprising to see Marine Le Pen follow suit in April’s French election. Recent scandals involving high profile politicians Nicolas Sarkozy and Francois Fillon will have increased France's disillusionment with mainstream politics, leaving the upcoming election to two previous outsiders in Marine Le Pen and Emmanuel Macron. Le Pen's pledge to resurrect the euro and hold a referendum on France's membership of the EU could threaten the political and economic stability of Europe.

With Britain’s exit from the European Union now underway, the election of eurosceptic governments in two of Europe’s largest economies would be a grave existential threat for the European Union, leaving Germany with the burden of propping up a struggling continental economy.

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