October 5, 2015
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 dollar is weaker almost universally following the release of last Friday’s still rather surprisingly weak Employment Situation Report and its incumbent non-farm payrolls; however, with the EUR having traded amidst panic to 1.1310 at one point following the report’s release, it is trading well off its highs and the same can be said of the Yen which traded to 118.70 amidst the same panic dollar selling last Friday but which is presently trading 120.05. Clearly then, there has been a material “revision” of the initial concerns about the weakness in job creation, shifting from one that… improperly… saw the report as a reason for further monetary ease on the part of the US monetary authorities, or at least a material delay in any attempts to tighten policy, to one that properly that gives “cover” to the European and Japanese authorities to push ahead with their own aggressive monetary ease.
Regarding gold, it has of course rallied sharply and well it should for the non-farm numbers on Friday means at least that the Fed’s present monetary policy shall remain stable and that “cover” has been given to the Japanese and the Europeans to increase their levels of their own QE policies, or at very best the Fed shall err toward easier polices again and that gives even further, larger cover to the Europeans and the Japanese. This is highly, egregiously, manifestly, materially bullish of gold in dollar terms, but most assuredly in Yen and EUR terms.