Gartman Suggests Gold Investors Stick to the Sidelines...For Now
Monday May 23, 2016 13:16
(Kitco News) - As gold struggles on the potential for a U.S. rate increase in June, one well-known commodities investor warns that it might be best for investors to stick to the sidelines--at least until the first rate hike occurs.
Speaking with CNBC, Dennis Gartman said he would be hesitant to owning gold in dollar terms right now.
“As we know, a strong dollar begets weaker commodity prices all things being otherwise equal,” he said. “With the strength of the dollar, that I think shall continue, it’s going to put downward pressure, on balance, on gold.”
He said that from now until the Federal Reserve’s June meeting, there will be much talk about the potential rate increase, which will continue to create a top in the market.
Gold futures remain in the red with June gold last down $4.50 at $ 1,248.40 an ounce. Meanwhile, the U.S. dollar index, which has been pressuring the yellow metal, has been getting a boost from rate hike talks, last trading at 95.32.
However, if he had to trade gold, Gartman said he would much rather be a buyer than a seller right now.
For now, Gartman suggested “the sidelines is the proper place to be” for gold investors, noting though that it would be wise for investors to buy gold again once the Fed hikes.
By Sarah Benali of Kitco News; sbenali@kitco.com
