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Dennis Gartman Says Gold Wants to Go Higher

Release Date: 
Thursday, August 30, 2012

The price of gold was higher ahead of the Federal Reserve meeting in Jackson Hole. Gold was up $7.70 at 6:00 a.m. Pacific Time on the New York Spot market, trading at $1,664.80 per ounce. Spot silver gained $0.13, trading at $30.96 per ounce.  (Click here for the most current spot prices.)

"We think the most likely outcome tomorrow will be an extension of the very low interest rates until 2015," said Saxo Bank analyst Ole Hansen. While this could initially disappoint investors, the affirmation a low interest rate policy will support gold prices, he said. "(There was) a bit of profit taking yesterday, but considering the move higher last week it is holding up very well, with investors reluctant to let go," Hansen said. "As long we can hold $1,630 support on any pull-back, the technical outlook looks pretty good.”

Barclays Capital technical analysts said that a move for gold “above $1,700 signals further upside potential toward $1,768/88."

Investor Dennis Gartman commented on gold, saying “in dollar terms I’m going to be a buyer versus a seller.” According to the widely followed expert, “gold is nothing more than another currency…another reservable asset…and I think most of the central banks are still underrepresented in gold…it looks like it wants to go higher so I think that’s probably what it’s going to do.”

“There is official interest in gold and central banks are buying, from Russia to Korea,” said Jeremy East, global head of metals trading at Standard Chartered Plc. “Central bank purchases are not driven by price but by asset allocation.”

(Sources:  “Gold holds steady ahead of Jackson Hole,” Reuters, August 30, 2012; “Gartman Says Gold Wants to Go Higher,” CNBC, August 29, 2012; “Gold Set For Best Year Since 2010 As Stimulus Bets Increase,” Bloomberg, August 27, 2012)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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