From today's Gartman Letter...... (12-24)

"COMMODITY PRICES ARE MATERIALLY HIGHER as the trading world has embraced the weaker US dollar and has reached for what it considers to be over-sold prices for grains, for base metals, for the precious metals et al. However, we shall again counsel everyone to be very judicious in their trading activities at this time of the year and to place somewhat less “authority” in technical analysis than one might otherwise. Rather like the former US Sec’y of State, Warren Christopher, “We urge caution.”

Nonetheless, the rather swiftly rally in gold this morning is quite impressive as shorts run for cover. Our friends at thebulliondesk.com note that much of the buying might well be “window dressing” for the year end and we’ll not argue with that assessment, for indeed it well might be. However, we suggest too that it is Indian buying now that prices have retreated to the levels at which the Reserve Bank of India bought its 200+ tonnes of gold from the IMF in November, and the Indian public is willing to buy on the retracement to that same level. Gold is strong too in foreign currency terms, rising as we write to €769, having held the important €760 level yet again.

The chart at the immediate right this page of gold in Indian Rupee terms is most interesting for one can see immediately how well defined is the bullish trend extending over the past several years and also how steeply inclined had the trend become through late November. Having risen to approximately 56,000 Rupees/Ounce, gold has corrected back toward 50,000 where short term support is evident. So long as 50K holds and so long as €760 holds, we shall hold bullish of gold too"