The gold price has continued to move higher today and is expected to remain well supported in the run up to the French Presidential elections.
At 3.56pm (GMT) gold was trading at $1,288 up from $1,283 in yesterday’s trading session.
As the election approaches and the possibility emerges of a Eurosceptic President coming to power, many investors are expected to seek out safe haven assets such as gold on the back of fears of political instability,
Analysts at BNP Paribas (PA:BNPP) Investments Partners said:
The rise of Melenchon reminds us that euro skepticism is a more widespread phenomenon across much of Europe than many believe, and that a runoff of Melenchon and the Front National’s Marine Le Pen would certainly give financial markets palpitations.
“The French presidential election may sour sentiment anew,” boosting at least short-term demand for gold, said Ilya Spivak, analyst with Daily FX. He said:
Leading candidates are clustered near 20% in the polls, making for unusually high uncertainty about who will make it into the final face-to-face contest. This fuels fears that right and left extremes Marine Le Pen and Jean Luc Melenchon, neither of which excite the markets, may be the last left standing.
Stacey Gilbert, head of derivative strategy at Susquehanna also believes that gold is a good bet at the moment, and the precious metal should be a part of every investors portfolio. She said:
Unless we have shifts there, there's no reason to unwind any of the gold positions here. We like it as a hedge to a broader portfolio, given that negative geopolitical events that could hurt stocks should end up helping safe-haven gold.