Tags: Dennis Gartman | Gold | Treacherous | Boring | Nasty Trade

Dennis Gartman on Gold: 'A Treacherous, Boring, Nasty Trade'

By    |   Tuesday, 23 September 2014 12:59 AM

Dennis Gartman, the editor and publisher of The Gartman Letter, warns that owning gold in U.S. dollar terms is a “treacherous, boring, nasty trade.”

The commodities expert told CNBC that such a strategy "just keeps losing money for anybody who buys it."

He said there “will be a time when inflationary pressures will once again exhibit themselves, but that time is not now." He said investors now face a deflationary environment.

Editor's Note:
Seniors Scoop Up Unclaimed $20,500 Checks? (See if You qualify)

"If you're fearful about inflation, you're wrong," he said. "Grain prices are down. Iron ore prices are down. Crude oil prices are down. Rubber prices are down."

However, gold futures for December delivery rose 0.1 percent to settle at $1,217.90 an ounce late Monday on the Comex in New York. Earlier, the price touched $1,208.80, the lowest for a most-active contract since Jan. 2.

The precious metal, which jumped to $1,392.60 in March, has almost erased this year’s gain. On Dec. 31, the price settled at $1,202.30.

The precious metal;s price has been pressured by a stronger dollar and expectations of higher U.S. interest rates.

"Some investors thought gold may have fallen a bit too far and decided to buy," said Bill O'Neill, a principal at Logic Advisors. Despite the day's turnaround, "the psychology around gold remains quite negative," he told The Wall Street Journal.

Gold has dropped 7.9 percent this quarter, while the dollar has climbed 5.4 percent against a basket of 10 currencies, reaching the highest since June 2010.

Meanwhile, Gartman said that owning gold in other currencies was a better trading strategy.

"Owning gold is non-U.S. dollar terms, however — owning it in yen terms, owning it in euro terms — has actually been OK," he said. "You're down about 1 percent over the course of the last two or three years, whereas if you own gold in dollar terms, you're down like 35 percent."

Many experts paint a bleak short-term future for the precious metal.

“Gold is expected to remain bearish against the backdrop of an improving U.S. economy and dollar strength,” Huang Wei, a Shanghai-based analyst at Huatai Great Wall Futures Co., wrote in a note, Bloomberg reported. “Even if consumption picks up at these lower levels, it won’t be enough to boost prices.”

Editor's Note:
Seniors Scoop Up Unclaimed $20,500 Checks? (See if You qualify)

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Finance
Dennis Gartman, the editor and publisher of The Gartman Letter, warns that owning gold in U.S. dollar terms is a "treacherous, boring, nasty trade."
Dennis Gartman, Gold, Treacherous, Boring, Nasty Trade
392
2014-59-23
Tuesday, 23 September 2014 12:59 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved