Theresa May’s Resignation: Bad for Britain, Good for Gold?Paul-Martin Foss
The resignation of British Prime Minister Theresa May has thrown the UK into turmoil. In the midst of trying to exit the European Union, the country now has to select a new Prime Minister to lead the Brexit process. With the British public continuing to support Brexit in large numbers, it appears that Brexit is a done deal. The only question is, how will it occur?
May was unable to get Parliament to agree to the deal she had negotiated with the EU. Given the UK’s border issue with Ireland, that’s an important issue that needs to be resolved. Also of concern is travel to the European continent, with the Eurostar trains currently traveling through the Chunnel a popular means of travel for both tourist and business travel. A hard Brexit could lead to long wait times and significantly decreased ease of travel to Europe.
With the deadline for Brexit now extended to October, the UK has only a few months to select a new leader, come to an agreement on how to leave the EU, and finalize its leaving. With every passing day the likelihood of a hard Brexit grows more and more certain. And that has many both in the UK and in Europe very worried.
While many people in the UK have prepared for a hard Brexit, in the event that it does occur it will still be very jarring economically. Fears over Brexit have driven up gold demand in the UK and throughout Europe, with many investors deciding to stash their assets in gold in case of an economic crash brought about by a hard Brexit.
The longer there is no resolution to the Brexit situation, the longer gold demand in the UK will remain strong. And, as with an increase in demand anywhere else in the world, with more demand comes higher prices. That’s good news for those investors who had the foresight to secure their retirement savings with gold before prices jump.
Image: UK Government