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Political Uncertainty Can Create Investment Opportunities

Published 05/30/2018, 04:46 AM
Updated 07/09/2023, 06:32 AM
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The Italian political crisis rumbles on after the Five Star and League political parties have not come to an agreement to form a coalition.

There has been further political unrest in Spain with the Prime Minister due to face a vote of no confidence, causing further tensions in Southern Europe.

According to the BBC, Italy's FTSE MIB closed down 2.7%. The UK's FTSE 100 fell almost 1.3%, while Germany's Dax was down 1.5% and France's CAC 40 1.3% lower.

However, with all these events occurring simultaneously, it still presents an opportunity to invest. Prices will be fluctuating daily until an outcome is settled.

If we look specifically at prices of gold on the UK markets yesterday 29 May 2018: at 9:00am, the price of gold was at £979.92 an ounce. This rose to a day high £989.03 an ounce only 35 minutes later but sharp declines meant by 14:10, the day low was reached at £973.81 an ounce. By the time the market closed at 17:00, the price of gold had risen to £983.18 an ounce.

As we can see, it could have been a very profitable day if you were to buy and sell gold on the market.

Such large fluctuations can present potential gains that are not usually there for the taking.

Assuming the likelihood that nothing will be settled soon (Friday being at the very least in regards to Spain), the markets will continue to change reflecting the nations' moods.

Day traders in particular should be looking at these uncertain times with intrigue. Spotting trends early can potentially create large gains that would not normally be available.

Keep an eye over the next few days and weeks for any developments in the Italian and Spanish political landscape. Any breaking news could potentially create sudden movements in prices.

Since the prices of gold are linked to a country's economic status, it's fair to say that investing in this market can be as rewarding as it is fickle.

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