"European markets are heading higher in early trade, with the French CAC 40 leading the push despite ongoing political uncertainty that not only sees the country without a Prime Minister, but also faces calls for President Lagarde to step down. While the swift resignation of Sebastien Lecornu understandably brought selling pressure for French stocks, today's recovery highlights the degree to which markets are willing to overlook this political instability if it means that the previously touted spending cuts are taken off the table."
"Gold prices continue to boom, as the so-called "debasement trade" pushes precious metals sharply higher once again. While a year ago all the talk was whether we could see gold hit $3000, the new topic is just how long it will take to reach $5000. Ultimately the drivers for gold remain focused around a number of factors, some of which look unlikely to change anytime soon."
European markets opened higher with the French CAC 40 leading gains despite political uncertainty that left France without a Prime Minister and prompted calls for President Lagarde to step down. Selling pressure followed Sebastien Lecornu's swift resignation, but markets rallied as the prospect of previously proposed spending cuts being abandoned eased investor concerns. Many top-tier French companies are globally oriented and expected to remain insulated from domestic turmoil. Gold has surged as a perceived debasement trade, driven by dollar weakness, potential rate cuts, rising sovereign debt, heavy Treasury issuance, and broad central bank buying. Central bank gold purchases and record ETF inflows have supported prices.
Read at London Business News | Londonlovesbusiness.com
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