Euro Remains Weak Under Greek Uncertainty
Dennis Gartman has been directly involved in the capital markets since 1974 and has been publishing his daily commentary, The Gartman Letter, since 1987. Mr. Gartman is a strategic partner with the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN) and lends his institutional insight to educate advisors and investors about trading gold in different currency terms.
The Euro is quite weak and it has fallen relative to all other currencies, major and minor, as the hoped for resolution between Greece and the “Troika” has failed to materialize. One cannot keep up with the various comments from the participants in the talks taking place between the parties in question; one comment from an anonymous Greek official might seem utterly intransigent, while the next shall seem reasonably cooperative. The same can be said of the Germans and others on the German side of the questions: one official sounds as if the problem can be readily resolved while the next sounds utterly without hope for even the slightest bit of cooperation. In that environ, the EUR has sold off for confusion, as we always are wont to say, breeds contempt all other things being otherwise equal.
Gold/EUR has been correcting since the third week of January, and we find it of interest that it has taken 22 days to correct less than one third of the rally that developed from the 22nd of December through the 26th of January. Corrections that take time to develop and do not carry far are almost always corrections that inevitably end in the direction that had prevailed previously; in this instance, with higher prices… likely sooner rather than later. As we write, gold/EUR is trading approximately €1084/oz., but it shall take a movement upward through €1100 to clearly end this correction.