Gartman Says He is Steering Away From Dollar/Gold
New York (May 19) Famed newsletter writer Dennis Gartman says days like Wednesday, are the reason he prefers owning gold in non-US dollar terms.
“[W]e are able not to absolutely “throw up!” With gold plunging in US dollar terms, it fell but fell only marginally in terms of the EUR and of the Yen,” Gartman wrote in his Thursday edition of The Gartman Letter
Gold prices notched a three-week low in early U.S. trading Thursday, on follow-through selling pressure in the wake of bearish FOMC minutes released Wednesday afternoon. June Comex gold futures were last down $27.6 an ounce at $1,247.
“If the monetary authorities here in the U.S. are intent upon tightening monetary policy then it is proper to err in favor of owning gold in terms of the currencies where the monetary authorities have no choice but to err toward ease instead,” Gartman said. “[A]s the news of the Fed’s minutes become clear, we chose to move away from dollar/gold and back to gold/euro and gold/yen.”
In terms of the latest Fed minutes, Gartman added that the minutes are evidence that the Committee members are giving themselves ‘room to maneuver.’
“If the economy improves and is truly shown to be by the data to be released between now and mid-June, then the Fed will raise rates in June… or very soon thereafter… but the course is not fixed; there shall be room to move in both directions,” he said.