On Tuesday 26th June, the price of gold has plunged once again, to 642$/once, and the price of silver even more at 12,25$/ounce.
It could even make one doubt about the case for precious metals.
A few days before my favourite Gold Stock had plunged even more, threatening to break its oldest support levels.
But the weakness of Gold is paradoxically reassuring me on my investment in this gold stock. It means that there is nothing specifically wrong in this company. The context is just temporarily bad.
And I have no doubts that the price of gold is going to rebound because the US Dollar is getting weaker and weaker against more and more currencies, especially the Euro and the Pound Sterling.
The Swiss Dollar could follow and maybe even the Japanese Yen (from its current lowest level).
I think a perfect storm is building on the currencies front.
Ultimately, the weakness of the dollar is going to transform itself in a new rebound for Gold.
I think currencies are the precursor of gold moves, because they their transaction volumes are huge and undisputable.
Also the price of the crude could play a role in these new movements, and the medium term trend is up.
For all these reasons, I believe the recent weakness in Gold is probably a Bear Trap.
I wouldn't wait for the end of the summer to be positioned in precious metals.
If only because a geopolitical crisis could develop at any moment, and it could be the worst one in a very long time.
Of course the worst is never certain.
But we should prepare for the eventuality of something big, in matters of investment.
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