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Gold Ahead of Jackson Hole - Dennis Gartman

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Dennis Gartman

(Kitco News) - The monetary authorities in Europe, Asia and eventually in the U.S., have no choice but to bring back quantitative easing, this was the latest message from long-time market watcher Dennis Gartman on Thursday.

“…[t]he monetary authorities in Europe and Asia… and eventually too here in the US… have no choice but to err upon the side of expansion and they haven’t any choice but to bring QE back and bring it back “in size” and duration,” he wrote in his latest installment of the Gartman Letter.

Ahead of U.S. Fed Chairman Jerome Powell’s speech on Friday at Jackson Hole, gold prices retreated as investors locked in profits. On Thursday morning, gold spot prices were down $2.80 at $1500.40, while December gold futures were last down $12.10 an ounce at 1,503.50.

But Gartman said he was fine with the current gold price scenario.

“Certainly we are happy to see spot gold remaining at or near the psychologically important $1500/oz level and we’d of course preferred to see Euro-denominated gold trading above EUR 1360/oz… nothing untoward has been done to the charts in either case and so we sit tight, acknowledging the appropriate nature of the current consolidation and waiting patiently for it to run its course,” he said.

He added, “Regarding the ETFs… which are so very important to the precious metals…GLD yesterday added 6.74 tonnes to its gold holdings and they are now to a level not seen since late May of last year.”

On the topic of silver, the newsletter writer said the metal was finally starting to see movement and take a cue from gold.

“Silver does seem to have taken the lead from gold as the Gold/Silver Ratio (GSR) has stabilized at or near to 88:1. We tend rarely if ever to trade silver here at The Gartman Letter (TGL) given its volatile nature, but a weakening GSR is truly one of the hallmarks of a precious metals’ bull market.”

Adding, “We shall need to see the GSR break down through 86:1 to truly feel comfortable.”

September Comex silver prices were last down $0.171 at $16.98 an ounce.

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