From Scotland to Syria: How World Events Change The Price of Gold

Posted on January 31, 2015 @ 9:01 PM EST

The world is a big place, with many exciting things happeningWaking up in the morning, you often get to hear news from all around the world. When you sit at your dining table, you might start looking at the headlines that tell you about events both local and global. Turn on the radio in your car and you can hear dozens of news stories on many stations, ranging from human interest stories from your community to shocking exposes and stories taking place oceans away. When you get to work, people gather around the water cooler and share their opinions on the biggest news stories and events. If you check the Internet, you can get real time updates on everything from sports games to terrorist attacks. The one side effect of this sort of news-saturated culture that we often forget the last big story when a new headline draws our attention. It’s easy to forget about the biggest events of 2014, especially since 2015 has already had some memorable events. There’s one group of people who might be especially interested in looking back at the previous year’s biggest landmarks: gold investors. Boston, Scotland, Egypt, Syria, and other events across all of the continents have seriously changed the price of gold. It may seem unlikely, but the events from the other side of the world can actually change the gold market – for better, and for worse. We take a look at how some of the biggest stories of 2014 changed gold investing.

The Vote for Scottish Independence

The vote for Scottish independence was a close call.Just a few months ago, the United Kingdom was faced with a vote – should Scotland be an independent country? This was an issue that brought out strong  emotions on both sides. Scottish patriots, organized under the banner of ‘Yes Scotland’, heavily campaigned for independence. ‘Better Together’ was their main ideological opponent, arguing that Scotland would be healthier as part of the United Kingdom. There is a lot of history behind the concept of Scottish independence, and the debate was fierce. There were many issues that had to be considered, of course. New currencies, political parties, infrastructure, and systems would be needed to support an independent Scotland. Needless to say, gold investors kept a keen eye on the situation. Independence could destabilize the European Union and cause further economic problems, but having to forge a new currency could affect gold’s price. The market responded accordingly, with the price of gold rising in anticipation to match the demand. The market value of gold lowered again when the vote returned a “No”, and the media moved on to the next big story.

Unrest in Syria and Discussion of Intervention

One of the biggest topics that came up in 2014 is whether the United States would be intervening in the Syrian war. The price of gold rose despite the fact that there was no actual intervention; the war and the debate of whether to intervene or not was enough to affect the market. There has been conflict of one kind or another in this country, but the Syrian Civil War is what ignited global interest and headlines. With 6.5 million Syrians being displaced, 3 million Syrians fleeing to nearby countries, and millions more struggling to obtain the basics, it’s easy to see how the region has been so severely destabilized. The situation doesn’t seem set to improve, and so the region is affected and made less stable overall. The end result? Higher gold prices and demand.

Diwali: The Yearly Festival That Celebrates Light Over Darkness

The above two stories can seem a little bleak, but it’s important to remember that there’s a lot of good in the world. For instance, Diwali, the Festival of Lights. This Hindu festival that is celebrated in autumn every year, on the darkest night of the fall, when the new moon is rising. People who celebrate Diwali tend to do so with a lot of gold. They wear their best outfits, with fine pieces of jewelry. They watch fireworks, feast with friends, and share the joy with their community. In a world filled with conflict, this celebration is a time of peace, love, and joy. It also kicks off a good economic period, as it is followed by a major shopping period. The price of gold will rise around Diwali, as the demand raises. Luckily, you can track this like clockwork, as the dates for Diwali are tracked well ahead of time.

The FIFA World Cup

Fans from all around the world came to see Germany and Brazil face off on the fieldThis entry is quite a departure from war or political disputes – 2014 was a year where the FIFA World Cup grabbed the world’s interest. Unlike the other points on this list, gold investors actually saw gold prices drop around the time the FIFA World Cup was active. Most people didn’t notice this – they were too busy marvelling at Germany’s win over Brazil, or cheering for their favourite team. However, the large economic boost stabilized and bolstered the area greatly. The result? Lower gold prices. This meant that while fans were cheering on the football action, investors were more focused on the market’s dip.

EDI Refining may be located in Ontario, but when it comes to gold, we like to look at events all around the world. If you’re looking to buy or sell your gold and silver, we’re the perfect choice. If you just want to learn more about investing in precious metals, we’ve got you covered; just visit our blog to find a variety of articles for investors both new and old!