{"id":12373,"date":"2012-11-13T15:41:52","date_gmt":"2012-11-13T22:41:52","guid":{"rendered":"http:\/\/www.itmtrading.com\/?p=12373"},"modified":"2013-03-18T14:02:04","modified_gmt":"2013-03-18T21:02:04","slug":"dennis-gartman","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/dennis-gartman\/","title":{"rendered":"Dennis Gartman Bullish on Gold: \u00e2\u20ac\u0153Don’t Fade it\u00e2\u20ac\u009d"},"content":{"rendered":"

Following a Bank of America Merrill analyst\u00e2\u20ac\u2122s projection about Gold<\/strong> hitting $2,400 in the next two years, Gartman Letter editor Dennis Gartman expressed his doubts about the figure to CNBC, but his opinion on the yellow metal to \u00e2\u20ac\u02dcFast Money\u00e2\u20ac\u2122 was clear.<\/p>\n

\u00e2\u20ac\u0153I think clearly the trend in gold<\/a> is from the lower left to the upper right\u00e2\u20ac\u00a6 Clearly, it\u00e2\u20ac\u2122s moving higher. Clearly, the expansion of the monetary aggregates is going to drive gold prices upward. It is a bull market. Don\u00e2\u20ac\u2122t fade it,\u00e2\u20ac\u009d said Gartman.<\/p>\n

In a note to the clients on Tuesday, Bank of America Merrill Lynch global trade analyst Francisco Blanch said, \u00e2\u20ac\u0153The new target reflects our view that the Fed will maintain mortgage purchases until the end of 2014 and will move to buy Treasuries following the end of Operation Twist this coming December.\u00e2\u20ac\u009d Operation Twist is a nickname for a program conducted by the \u00e2\u20ac\u02dcFed\u00e2\u20ac\u2122 (the U.S. Federal Reserve) that was initiated in late 2011-early 2012 for revitalizing the economy. It is an initiative to buy longer term Treasuries and sell shorter dated issues in order to scale down long-term interest rates. The Operation derives its name from the fact that it \u00e2\u20ac\u02dctwists\u00e2\u20ac\u2122 a \u00e2\u20ac\u02dcyield curve\u00e2\u20ac\u2122, which is a simple representation of the interest rates of a mature bond and when the bond pays. As the Fed buys longer term bonds, it helps drive prices up and yields down, which contributes to the twisting of the curve.<\/p>\n

Quantitative easing is an unorthodox method of introducing fresh money into the finances of a country when existing monetary policy has been rendered ineffective. It is carried out by a central bank or agency (in this case the Fed) by buying financial assets from commercial banks with newly procured money in order to reinforce the quantity of money circulating in an economy. Federal Reserve Chairman Ben Bernanke has ordered the third round of quantitative easing since the financial crisis of 2008, called the QE3, in which there are plans to expand long term securities with open ended purchasing of $40 billion worth of debt mortgage a month. It is a matter of serious concern for Bernanke as the unemployment rate has hung above the 8 percent since three years, and he plans to remedy it with unconventional tools.
\nIn its statement on how long the QE3 would last, the Federal Reserve has used open ended language in saying that it would continue purchases and look for other methods till the labor market shows significant improvement.<\/p>\n

Blanch further added to his statement, saying: \u00e2\u20ac\u0153Given the new open-ended nature of QE3, the upward pressure on gold prices should continue until employment is strong enough to require a change in policy. In our view, this is unlikely to happen until the end of 2014.\u00e2\u20ac\u009d<\/p>\n

In his report entitled \u00e2\u20ac\u0153Gold under QE Infiniti,\u00e2\u20ac\u009d Blanch says, \u00e2\u20ac\u0153The combination of open-ended MBS purchases and the possibility of additional Treasury bond purchases starting in December could further lift gold prices by adding over $2 trillion to the Fed\u00e2\u20ac\u2122s balance sheet over the next two years.\u00e2\u20ac\u009d<\/p>\n

Looks like it is good for gold.<\/p>\n","protected":false},"excerpt":{"rendered":"

Following a Bank of America Merrill analyst\u00e2\u20ac\u2122s projection about Gold hitting $2,400 in the next two years, Gartman Letter editor Dennis […]<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1207],"tags":[59,435,904,1310,1311],"class_list":["post-12373","post","type-post","status-publish","format-standard","hentry","category-blog","tag-gold-2","tag-bullish-gold","tag-yellow-metal","tag-gartman-gold","tag-dont-fade-it"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/12373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=12373"}],"version-history":[{"count":8,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/12373\/revisions"}],"predecessor-version":[{"id":13674,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/12373\/revisions\/13674"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=12373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=12373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=12373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}