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Posted by on Apr 10, 2017 in Dennis Gartman, Market Insight

Dissecting Gold’s Reaction to The Syrian Attacks

Dissecting Gold’s Reaction to The Syrian Attacks

April 10, 2017

Dennis Gartman is editor and publisher of The Gartman Letter, and strategic advisor of the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN). He regularly contributes to AlphaBaskets and lends his institutional insight to educate advisors and investors about commodities and the forex markets, including about trading gold in different currency terms.

Gold was of course sharply higher for a rather long while on Friday as the markets tried to understand the seriousness of the situation in the Middle East following the US attack upon the Syrian air base from which Assad’s forces has launched their now infamous “gas” attack upon his own citizens. However, as that situation did not worsen, gold sank late in the day on Friday. Now, however, with the Korean situation worsening, gold is finding a modest bid once again.
The technical damage wrought on Friday with the late sell-off remains acute, however, for we are always concerned with stops that had been in place above a market and are touched-off and yet the market sinks. It shall take a day or two or more of sideways action and/or even reasonable strength for the gold market’s internal collective health to be restored in full.
Certainly we do not wish to own gold in dollar terms at this point and indeed the only logical trades are to remain long of gold in non-US dollar terms for the dollar reigns reasonably supreme for the moment at least.
We shall watch the developments in the forex market, and especially we shall watch developments in the EUR/CHf cross, for if 1.0650 in the cross is “given” later today and especially if 1.0625 is “given” even later that will argue that capital in Europe is indeed frightened and frightened capital is gold bullish of course.

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