It is expected that the French will vote ‘No’ to the European constitution on May 29 This will give strength to the US dollar and will create serious concerns for the Euro. However, it will be very positive for the gold price and may send western investment demand for gold through the roof!
"With each passing day, given the problems incumbent in the Euro as Europe moves toward the constitutional referenda in the Netherlands and France, we can make the stronger, and ever stronger, case that Gold Price in Euros shall move higher even as the dollar itself gains relative to the Euro.
Gold shall become a more "reservable" asset as central banks who might have been interested in diversifying their assets away from the dollar now find the Euro less and less attractive, and find gold somewhat more so." said Dennis Gartman thegartmanletter.com
Deutsche Bank warned yesterday that a likely French 'No' to the European constitution could begin a wave of currency speculation across Eastern Europe, setting off a chain of economic disruption.