We know at this point that our argument seems somewhat monotonous for we’ve been consistent in our thesis, but even now we hear reports of the inadequacy or the unnecessary complexity of our thesis. Our thesis is not complex; it is simply that we wish to “fund” our position in weak currencies, avoiding “funding” them in the currency that has been and shall continue to be the world’s reserve currency that is and has been strong.
As spot gold in US dollar terms was trading to $1222, we thought there would be… and indeed there has been… resistance at that level and upward toward $1224. That resistance has proven to be reasonably formidable in the short term.
It will continue to be reasonably formidable for a day or two or three longer, but support shall be evident at the $1210-1214 level as other commodity prices are firm AND as the gold trading community becomes convinced that the monetary authorities around the world have collectively embarked upon demonstrably easier monetary policies that will in the end engender inflation and will in the end offer strong support to gold.
This article was written by Dennis Gartman. Gartman is editor and publisher of The Gartman Letter, and a strategic partner with the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN) who lends his institutional insight to educate advisors and investors about trading gold in different currency terms.
