Gartman Says Gold Will Move 'Quietly Higher;' Bitcoin Has Seen Its High
Editor's Note: This story has been updated to reflect today's prices. It was originally posted on June 27.
(Kitco News) - Despite recent pressure, famed investor and gold expert Dennis Gartman says he’s "reasonably impressed" with the metal’s performance, especially as sister commodity crude oil struggles.
“Given the fact that crude has been under some very real pressure over the last month or so, you have to be reasonably impressed that gold has, at least, held its own,” the editor and founder of The Gartman Letter told Kitco News in a phone interview Tuesday.
In June, crude oil tumbled to a low of $42.05 a barrel, a level last seen in August 2016. West Texas Intermediate (WTI) crude oil has since rebounded. Meanwhile, gold prices are higher Tuesday following Monday’s steep sell-off, last at $1,223 an ounce in electronic trading.
And, despite the recent noise in the gold market, Gartman remains bullish on the metal.
“I hesitate to say there’s any great short-term correlation between the two,” he said. “On balance, gold whether it is in dollar, euro or yen terms, I think gold wants to move quietly higher.”
Even if there are negatives ahead for gold, like the Federal Reserve’s plans to tighten, Gartman said he is impressed by the metal’s resilience this year.
“The psychology is overwhelmingly bearish and yet prices are not making new lows, that is worthy of note,” he said.
Gartman also had very harsh thoughts on the new gold in town: cryptocurrencies. And, to the longtime investor, the leading crypto bitcoin has already seen its high.
“I don’t think there’s any question bitcoin saw its high a month ago and the fact that ethereum had its blow up last week shows you how tenuous are the underpinnings of that market.”
Despite his bearish assessment on the virtual currencies, Gartman said he thinks blockchain technology is “genius” and wouldn’t be surprised to see the technology used to trade stocks in the future.
However, he does not view these new forms of exchange as a currency.
“The reason for bitcoin to have been created was ostensibly to be used as a purchasing mechanism, like dollars; but if something is able to move 15-20% in the course of a day, how can that possibly be used as a purchasing mechanism?” he questioned.
“I think it’s the most comical, ludicrous, and silly notion to come down the pipe since tulip bulb mania of the 15th century.”