From today's Gartman Letter...... (Jan. 21)

"Turning then to gold and the precious metals, with the dollar being strong how can they be anything other than weak? They cannot, and so they are, with the obvious exception of palladium which is enjoying the benefits of being accumulated for the ETF that was recently permitted. In broad terms, the bull market for gold remains intact, but clearly it has been injured, and even more clearly we are wise to own gold in foreign currency terms for in terms of the EUR, or the British Pound Sterling, or the Swiss franc et al the bullish trend is still very well established. We have been wise in hedging away the inherent US dollar exposure that one has when owning gold only in US dollar terms, and until that is proven unwise we shall sit tight.

That having been said, from a purely technical perspective we think we see that gold in dollar terms has settled back into “The Box” that marks the 50-62% retracement of the rise in the hourly charts that took spot gold from $1070 back a day or two before Christmas to $1161 nine trading sessions ago. “The Box” demands support somewhere between $1106-$1116, and at its worst yesterday spot gold fell to $1108, right into the middle of that range. We would hope that that low… or very near… shall hold. It should. It has our interest therefore.

Finally, just as it was interesting above to note that the Russian Central Bank has begun buying Canadian dollar denominated assets, it is also interesting to note that it is also buying gold…or more properly is continuing to buy gold for its reserves. According to TheBullionDesk.com, Russia last month added 24.9 tonnes of gold to its gold reserves, adding to the 6.2 tonnes it bought in November and the 15.5 tonnes it bought in October. In total last year Russia bought 134 tonnes of gold. The problem for the gold enthusiasts is that Russia didn’t need to go into the open market to bid for those sums of gold unlike India. Rather, the Central Bank was able to buy what gold it wanted from its own domestic gold miners… and it did exactly that. Thus the Russian gold buying did not get and should not have gotten the publicity that the Reserve Bank of India’s gold buying foray got last year. According to the World Gold Council, Russia is now the eighth largest holder of gold as a reserve asset in the world, just passing in the past two years Japan, the Netherlands and the ECB. Make of that what you will."



His open PM positions on 1-21

Long of Two Units of Gold in EUR terms, Two Units in Sterling Terms and Two Units in Yen terms: We bought gold August 5th at €671 and again Nov. 23rd at €778.20 for an average of €724.60. Gold is trading €788.05 this morning, compared to €797.05 yesterday. Further in August we bought gold in £ terms at £594, and we added to it Nov. 23rd at £702.60 for an average of £648.30. It is £685.20 presently, compared to £695.75 yesterday. Finally, we own gold in Yen terms also, and as we finish, gold is trading ¥101,570/oz. compared to ¥102,900 yesterday

Dan