Gold prices are forming a bubble but they're going to keep rising anyway, says investment guru Dennis Gartman.
Prices of the precious metal have hit $1,130 an ounce, which Gartman admits is “mind boggling.”
“It is a gold bubble,” Gartman told CNBC.
Nevertheless, the dollar should continue weakening and that means gold prices will continue rising.
Gold is traded in dollars, so a weak dollar makes the price of gold attractive, especially when purchased in stronger currencies.
Aside from gold, Canada and Australian currencies are good bets due to rising interest rates in those countries, Gartman adds.
“If you're going to be any place, be there,” Gartman says of those two currencies.
With no end to the dollar's slide in sight, gold prices are continuing to rise, with central banks even buying more gold instead of the dollar, the world's traditional reserve currency.
Low interest rates in the United States coupled with wide deficits are keeping the greenback weak.
“Gold is in a secular bull market and all the fundamentals show that prices will keep moving higher,” Joe Foster, who helps manage $8 billion at Van Eck Associates in New York, told Bloomberg.
“We’re in an environment where financial stress, including the weaker dollar, is driving the price. Gold had been a forgotten asset for years and years, and now people are all starting to diversify into gold.”
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