Well, another unthinkable has happened. Great Britain has voted to leave the EU, despite the warnings of politicians, economists, business leaders and others about the consequences.
Scotland and Northern Ireland voted to stay in the EU; Wales marginally voted to leave and England carried the vote against remaining in the EU. Scotland and Northern Ireland are very unhappy about being dragged out of the EU against their wishes, breeding a lot of discontent in the United Kingdom.
As predicted yesterday, the price of gold and silver has soared on news of the exit. Both precious metals are up several percent. Gold broke through the $1,300 per ounce barrier again, reaching $1,336 and silver just broke the $18 per ounce barrier reaching $18.01.
The price of both metals has fallen back somewhat during the day. Prices are still higher than they were during the peak last week. Now that we’re heading into the weekend, prices are likely to remain high until Monday. How gold and silver will perform then is anyone’s guess.
As gold and silver soared, stock prices tumbled anywhere from 2% to 8%. The Dow Jones dropped by 2.2%, S&P 500 by 2.4% and the Nasdaq by 2.9%.
In Europe, things were worse. The Paris CAC dropped by 6.1%, the Frankfurt DAX by 5.5% whereas the London FTSE 100 Index dropped by 8%, wiping some $120 Billion from its value. Ireland suffered particularly badly with the Dublin ISEQ Index dropping by 7.2%.
In Asia, Tokyo’s Nikkei Index saw the biggest drop of 7.9% while the Hang Seng Index dropped by 2.9%.
What all this illustrates is that as the price of stocks drop due to an event, the prices of gold and silver rise. Many analysts believe that stocks are hugely overvalued anyway, so buying gold and silver is a smart move if you want to protect some of your money.
Max Keiser and Stacy Herbert, hosts of the Keiser Report, joined Goldmoney and BitGold CEO Roy Sebag and chief strategy officer Josh Crumb for a lively discussion (above) about gold ownership, banking, Bitcoin, and monetary choice. Recorded live at the Isabel Bader Theatre in Toronto, Canada, earlier this month. There’s a reason the smart money is moving into gold.