Looking For A Rally In Gold (GLD)

Looking For A Rally In Gold (GLD)

$GLD

Stocks’ pain has turned into Gold’s (NYSEArca:GLD) gain.

Gold prices rose to a 1-month high Thursday as fears of a global slowdown have participants seeking safe haven assets like Bonds & Bullion. And according to Dennis Gartman , The Commodities King, the rally in Bullion could be starting up again.

“There’s a real strength in the gold market when you look at it in non-US dollar terms,” the publisher of The Gartman Letter said Thursday in a TV interview. “The difference is enormous.”

While everyone focuses on Gold’s move relative to the USD, Mr. Gartman says the real story is what’s happening around the world. Pointing to Gold priced in Euros and Japanese Yen specifically

He said that Bullion has actually been outperforming.

As he noted, in Euro terms, Bullion is up 4.6% in the past 2 years and 6.7% over the past 5 years. Whereas related to the Yen, it’s up 4.8% for 2 years and 26.4% in 5 years.

Gold priced in USD’s has failed to hold its support marks in recent months, having fallen 12% from its late January high and now tracking for its worst Quarterly losing streak since Y 1997.

“It has been in a phenomenal, unending, malevolent bear market since November 2011,” Mr. Gartman noted. Since that time, gold has fallen nearly 35 percent. “If you have owned Gold in Dollar terms it has been a terrifyingly bad trade.”

For Mr. Gartman, owning Gold relative to foreign currencies should be a no-brainer.

“Why would you want to fund Bullion in a currency that has been strong when you can fund it in a currency that has been weak?” he asked. “Monetary authorities in Europe and Japan have been far more dovish than the Fed  and will continue to be far more dovish.”

He believes Gold could also benefit as the Fed further retreats from raising rates.

I am Neutral Gold in terms of the USD.

Have a terrific weekend.

HeffX-LTN

Paul Ebeling

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