Gold vs Bitcoin?
June 5, 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 is strong in non-US dollar terms. Gold/Yen had run into resistance at the ¥141,000-141,250/oz. level several times over the course of the past three weeks. On Friday it broke through that resistance and actually has been rising since trading began in Asia earlier today. AS we write, gold/Yen is trading at or near to ¥141,500/oz.
Gold/Eur, on the other hand, had found strong support since early last month between €1120-1125. That support was tested 5-6 times over the course of the past month and that we find impressive; however, gold/EUR also peaked twice during that period at or near to €1135- 1137/oz., and as we write it is trading €1136. To truly turn this market higher, 1137 shall have to be taken out to the upside and given the confusion in the UK elections… noted below at some length… and given the confusion regarding the spate of Muslim terrorist attacks in London, Paris et al, we have to believe that new and higher highs lie ahead.
We continue to fear, however, that Bitcoin continues to draw capital away from the gold market; that is, frightened capital that in the past always made its way to gold is being diverted to the speculative bubble that is the Bitcoin market at the moment. We expect this to end, but we shall have to admit that Bitcoin’s speculative strength has gone far farther than we might have ever dreamt possible!