Veteran trader Dennis Gartman appeared on CNBC Futures Now yesterday and he made it clear right up front that he is not a “gold bug.”
I’m not a gold bug. I don’t like the gold bugs. I’m not a believer that the world is coming to an end.”
After that disclaimer Gartman, the anti-gold bug said, “Buy gold!”
Video Length: 00:02:06
Gartman said as long as central banks continue expansionary monetary policy, the upward trend in gold will continue. And there is every indication that negative interest rates and quantitative easing will continue indefinitely. The stimulus the European Central Bank announced this week will last well into the future. As Bloomberg put it, “The ECB’s new measures have just entrenched policies designed for crisis times into the next decade.”
As we’ve been saying, that’s good for gold.
Gartman agrees:
Monetary expansion equals higher gold prices. That’s what you’ve got and the trend is up. Don’t fade this trend.”
Highlights from the interview.
“I’m a believer in the gold market at this point. I’ve been quite bullish on gold.”
“The trend is up, the trend has been up for the past several months, and I continue to think that as long as the monetary authorities are going to remain as expansionary as they are [the trend will continue.]”
“What Draghi said today, which turned the market…he made it abundantly clear that he was going to continue to expand the supply of reserves in the system, even though he wasn’t going to allow interest rates to go further into negative territory – that’s what caught people off guard – but he’s made it abundantly clear he’s going to throw more reserves into the system. The Bank of Japan will be throwing more reserves into the system. And the Fed will have no choice but to at least hold monetary policy steady, if not become slightly expansionary following what the leads are from the ECB. Monetary expansion equals higher gold prices.”
