The gold price has rebounded following last week’s volatility sell-off. Currently, the shiny metal continues to consolidate around $2,400. But one market strategist says gold still has plenty of upside momentum.
Dennis Gartman: Gold goes much further from here!
cryptokoin.comAs you follow from , gold broke a record last week, rising above $2,448. However, it also saw a sharp sell-off after that. Famous commodity investor Dennis Gartman says that gold has suffered some short-term technical damage for this reason. However, he adds that the precious metal has entered a multi-year bull market. “Gold goes much further from here,” Gartman said. “I expect gold to reach $3,000 in the next few years,” he says.
The real trade is gold against these currencies!
Dennis Gartman says he is bullish on gold because of the breadth of its record run. While investors evaluate gold in terms of US dollars, Gartman points out that gold has also reached record levels against the Swiss franc, Euro, British pound, Japanese yen, Canadian dollar and Chinese yuan. In this context, Gartman said, “This is much more than US dollar weakness. “The real trade is gold against the Yen and the Euro as the US dollar strengthens against those currencies,” he says.
This situation will continue to increase the safe haven demand for gold!
Market expectations for the Fed’s easing cycle have begun to wane. As a result, the US dollar made significant gains against major global currencies. Expectations are increasing that the European Central Bank (ECB) will start reducing interest rates before the Fed. Gartman expects the Fed to cut rates only once or twice this year. He also says easing will only begin after the US presidential election in November. However, he adds, gold’s rally goes beyond interest rates and bond yields.
Dennis Gartman notes that he sees an environment similar to the 1970s, when gold rallied as the Fed was forced to raise interest rates by double digits to combat inflation. In this context, the famous investor makes the following comment:
I think our current environment is in some ways much worse than the 1970s. There is much more confusion and uncertainty in today’s conflicts. This will continue to increase the safe haven demand for gold.
Gold demand of central banks and investors
Dennis Gartman states that as geopolitical tensions increase, the possibility of the USA using the dollar as a weapon against potential enemy countries may increase. He also notes that the US government is considering seizing Russian funds. Therefore, he states that some governments see this threat. That’s why governments continue to move away from the US dollar, Gartman says. Gartman also states that if China wants to use the yuan as a global currency, it must keep at least 20% of its reserves in gold.
Meanwhile, Gartman says demand for gold continues to rise. However, he states that investors ignoring this precious metal prevents gold from rising. However, he still predicts that gold prices will rise further.
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