Italy to Spark the Coming Gold Bull Market

We wrote last week:

Five Star Movement — an anti-establishment party — is the favourite to win the election on 4 March. [It] wants to renegotiate the country’s policies with the EU…If negotiations fail with the EU, [the political party says it will] let the people vote to leave the EU.

We expect a referendum put to the people in the second half of the year, provided Five Star Movement wins the election. Whatever happens, politicians tend to drag negotiations on for months. So, if Five Star Movement does win the election, uncertainty should rise across Europe later this year.

Five Star Movement won 32.6% of the vote. Not enough to lose any sleep…but it’s enough to scare the political elite.

A centre-right coalition won the most votes. That’s keeping elitists calm. But take notice of the coalition. It’s Forza Italia — former Premier Silvio Berlusconi‘s party — and the far-right anti-immigrant Northern League.

It could take weeks to form government.

The League and Five Star might join arms. But few expect that to happen. According to The Financial Times over the weekend:

One veteran Italian banker argues there is only a 10 per cent chance that Mr Mattarella [the country’s president] will hand government over to Five Star’s leader, Luigi Di Maio, or Matteo Salvini of the League’.

To be honest, most people are downplaying the vote. There’s a serious risk that we’ll see a referendum by year’s end. That’s regardless of who forms government. You can’t ignore the majority of Italians voted for Eurosceptic parties. And if they don’t get what they want, they could come together and force a referendum to leave the Eurozone.

A referendum could be on its way for Italy

Martin Armstrong — a legendary macro forecaster — wrote on his blog last week:

‘Salvini made a “gentleman’s agreement” with Berlusconi that if the centre-right were to win a majority, whichever party comes out with the most votes within the coalition would name the next prime minister.

I have written previously that removing Berlusconi from office was a coup staged by Brussels all because he was beginning to favor exiting the Euro. Salvini also publicly stated that the Euro as a currency was destined to fail, and he also said he would not rule out a referendum on the issue.’

Euro-sceptic parties hold the balance of power in Italy. 50% of people voted for them. The socialists were defeated following years of fiscal mismanagement. Indepenent.co.uk wrote last week:

“Nobody will be able to govern without the Five Star Movement,” said senior party member Riccardo Fraccaro. “We will assume the responsibility to build this government, but in a different way, talking with all the parties about what this country needs.”

Most people assume everything will be OK. It won’t. The survival of the Eurozone — and that means the euro — is at serious risk. That’s why Five Star Movement came out to avoid a panic. It wants to work on a new solution…rather than outright leaving the Eurozone.

Matteo Salvini — a strong candidate for Prime Minister — agrees. I don’t care what anyone says. Northern League and Five Star Movement could definitely form the next government. Salvini said at a press conference following the election:

“The Italian vote will give us the chance to rebuild a Europe founded on men and women and not on constraints, bureaucracy and choices made speculators on the back of other people.

“They won’t fool us anymore. In Italy, Italians will decide from now on.

“Not Berlin, not Paris, not Brussels.”

Good luck!

How will Italy leaving the EU affect the gold market?

Greece failed with its negotiations in 2015.

The UK voted to leave the European Union (EU) in mid-2016. Indeed, we all know how that’s turned out. European career politicians haven’t respected the vote. They refuse to negotiate with Britain. Jeremy Corbyn, Leader of the British Labour Party, is on their side. He’s a hard-core Marxist and wants to stay in the EU.

He’ll do whatever it takes to reverse the decision.

So as recent history suggests, Italy has little to no chance of negotiating a good deal. We’ll probably see months of negotiations. But they won’t go anywhere. Italy’s new government will likely get fed up by the end of the year. That’s why, contrary to most mainstream views, Italy’s new government poses a serious risk.

I believe Italy will hold a referendum to leave the Eurozone this year.

If Italy votes to leave, which looks likely given the election results, gold could finally break out into a bull market state. Remember, when Britain voted to leave the EU, gold shot up US$100 per ounce in a day. Unfortunately, Britain’s politicians didn’t respect their vote.

But given its deep depression, Italy could leave the EU this year. That’s likely to destroy the euro and send gold flying with the US dollar. So if you have been ignoring the junior gold sector, now is the time to pay attention.

Find out more here.

Regards,

Jason Stevenson,
Resources Analyst, Gold & Commodities Stock Trader


Jason Stevenson is Markets & Money’s resource analyst. He shares over a decade’s worth of investing and trading experience across resource stocks and commodity futures and options. He originally studied accounting and finance at Curtin University, where he was awarded a first-class honours degree. His professional background stems across high-net-worth, top tier accounting (corporate finance, tax and auditing), and sell-side equities research. Before joining the team at Markets and Money, Jason worked at boutique firms which advised fund managers and high-net-worth clients on where to invest. Whether it’s gold, crude oil, copper or an obscure metal like vanadium, you can rely on an in-depth analysis in Markets and Money. Jason also brings you extensive macro, political and geopolitical analysis from around the world. He leaves no stone unturned when it comes to telling the truth. Jason is also the lead analyst of Gold Stock Trader, a premium service for investors serious about precious metal stocks. Websites and financial e-letters Jason writes for:


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