From today's Gartman Letter...... (1-25)

"Gold is holding a bit better this morning, trading for a while back to $1103 earlier and trading back down to $1098 in US dollar terms. As we made rather clear… we hope… Friday, we turned away from being long of gold only in non-US dollar terms, as we have steadfastly maintained in recent weeks and months, to being bullish of gold in dollar terms given the President stridency and anti-capitalist rhetoric of late. Only time and price shall prove the validity of our decision, but for the moment at least it seems wise enough to hold to this changed thesis.

We found it interesting, Friday, that the gold stocks themselves were performing quite a good deal better than was bullion. Our old friend, John Brimelow, has taught us to pay greater heed to the relationship between gold bullion and gold equities, noting that the equities do indeed seem to lead at important turning points. Perhaps Friday’s “turn” for the better in the case of the gold equities was one such turning point, and for the moment we believe that is true. Thus, for the moment we are comfortable being long of a bit of gold in US dollar terms, unhedged in foreign currency terms, for the first time in rather a long while.


RECOMMENDATIONS

1. Long of Three Units of gold in US$ terms:
In light of our extensive comments Friday regarding President Obama and his antipathy toward the US capital markets and toward the dollar itself, we changed our perspective on gold entirely, preferring to own it in US dollar terms rather than in terms of the foreign currencies. Given that gold in dollar terms is perhaps twice as volatile as is gold in EUR terms, we reduced our exposure to gold while we covered our exposure to the foreign currencies. Thus, we wish to remain long of three units of gold in US dollar terms only.