It is interesting to that even as the grain markets are under such severe pressure and even as the global equity markets are under very real pressure and even as crude oil remains under pressure gold is firm… and so to the white/industrial metals: silver, platinum and palladium. Much was being made of the fact that gold had made its way back toward $1190 at one point Tuesday in Asian dealing but that it had failed rather badly in European and then North American dealing; however we have made nothing of that weakness, noting that the selling came on inordinately lesser volume and noting further than we consider much of that selling yesterday to be end-of-month, and end-of quarter and finally, in Japan’s case, end-of-fiscal-yearend selling and nothing more. Funds that have underperformed in the month and the quarter will have wanted at the end to show no position in gold, or to have reduced their positions for book-squaring purposes, but once again the selling was light; the volume was nearly non-existent. As we begin the new month and the new quarter there does seem to be better volume as metals prices are firmer.

It is also interesting to note that gold/EUR has run into strong resistance at or near the €1100-€1110/oz. level several times over the course of the past few weeks, while at the same time support for gold in EUR terms has quietly, but steadily risen. This is a chart pattern we are especially fond of: where resistance is strong at one level while support continuously rises. In battle terms, the bearish army is holding its own, but the bullish armies continuously is attacking from ever closer range, with the propensity of the latter finally to over-come and vanquish the former. Attention must and shall be paid to see if gold/EUR can trade upward through €1115/oz. over the course of the next several days.

This article was written by Dennis Gartman. Mr. Gartman is a strategic partner with the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN).

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