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Gold Looking "Impressive" Says Market Watcher Dennis Gartman

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(Kitco News) - Gold is getting a reprieve from a weaker U.S. dollar, which hit a 10-month low overnight, following Friday’s lackluster economic data, said market watcher Dennis Gartman.

It is reasonably impressive that gold is trading better even as the grains are weak, but perhaps the real strength is because the dollar is generally…weaker and that shall tend on balance to put a bid into gold, all things being otherwise equal,” he said in his Monday edition of The Gartman Letter.

Gartman’s comments come as the U.S. Dollar Index hovers near lows not see seen September, last trading at 95.17. Gold prices are moderately higher, hitting a two-week high in early U.S. trading Monday; August Comex gold was last up $6.80 an ounce at $1,234.30.

“We are even more impressed that euro-denominated gold is trading to €1075/oz. and is now trading upward through an important intra-day moving average it has not traded upward through since early June,” he said,

Gold’s rally Monday comes on the heels of disappointing retail sales on Friday, waning consumer confidence and talk of deflation, Gartman explained,

The Commerce Department reported that retail sales fell 0.2% in June while the expectation was that sales had risen by 0.1%.

“Onan annualized basis, retail sales are up 2.8% and some solace was taken with that number, but core retail sales, which exclude sales of cars, gas, building materials and food services, fell 0.1% for the month,” Gartman said.

The University of Michigan also reported Friday that in July its index of consumer sentiment fell from 95.1 in to 93.1.

“[T]he data has put off any thoughts… for the moment at least… of more aggressive monetary tightening here in the U.S. by the monetary authorities and that sent the dollar falling sharply: it remains weak as we write; it may continue so,” Gartman said.

Gold is holding on to gains despite some of the quietest trading volumes of the year, with the markets in Japan closed for the Marine Day holiday.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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