Dennis Gartman, the economist and author of The Gartman Letter, offers his views on the market in the third of a three-part series. On Wednesday, Gartman told Alix Steel why he was long, but not too long. And on Thursday, Gartman offered his take on gold and how he's investing.
NEW YORK (
) -- Dennis Gartman, author of
The Gartman Letter
, is bullish on
and the U.S dollar.
Gartman has taken a lot of heat for his gold calls in the past. In April 2008, he sold out of his gold position, but then in June went long again. Since then, gold prices have hit an all-time record high in U.S. dollars of $1,227 an ounce.
Gartman: Bullish on Gold
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TheStreet: Where do you stand now on gold
Gartman: Well, since basically October of last year I've been bullish on the gold market,
but not in dollar terms. I've been bullish of the gold market in euro terms, bullish of gold in sterling terms, bullish of gold in yen terms, bullish of gold in Swiss franc terms. I'm not particularly bullish
on the gold market in dollar terms and that's actually been the wise way to go ... Gold in dollar terms is ... $150 below where it was on its high the first week of December, but in euro terms, Swiss franc, yen terms it's at new highs ... I've been that way since October. I'm not changing now.
Are you building up your position as you go or are you just holding gold for the long term
Well, I run a hedge fund and ... we try our best to stay long. There have been times where I have been longer. There have been times since October where I was on the sidelines. But on balance, when I've been in the market, I've been long.
How are you buying
I own gold in Swiss franc terms. I own gold in euro terms. I own gold in sterling terms. And I own gold in yen terms.
What are you buying? Physical gold? ETFs? Metal stocks
Yes, yes and yes ... I own a very small amount just for myself and my wife of physical gold. But that's just a very small amount.
My hedge fund own
s gold in futures terms. We own gold in terms of
Market Vectors Gold Miners ETF
. We own gold in terms of the ETF itself
SPDR Gold Shares
Are there other specific mining companies that you look into
If I'm bullish on gold ... I don't want to own miners because I don't want to be exposed to the idiocy of management. If I'm going to be a buyer of gold I'd rather own the purer play ... rather than the leveraged play which comes with being long of gold mining stocks. I just have no interest in gold mining stocks at all.
Can you give a price target for how far you see gold going
I've been in the business for 35 years and the best that one can do is to get the trend right ... And when I hear people say, 'Well I think that gold is going to $3,000' -- what if it gets to $2,950 and it doesn't get to $3,000 and people think you're a fool? ...
Right now, as I like to say, the trend for gold in all of these non-U.S. dollar denominated manners is from the lower left to the upper right on the chart.
Where will gold go? I haven't the faintest idea. I couldn't tell you if my life depended upon it other than the trend is up ... the only people who are short who have made any money are those who are short of gold in US dollar terms. Anyone who is short of gold in foreign currency terms has had a very bad year and a half ... I would bet that six months from now it would be higher than where it is now. I would bet that in a year from now it will probably be higher than where it is six months from now. But where do I think it's going to go? I haven't the faintest idea.
Now the gold trade is very crowded ... So why do you still want to be in a trade that's crowded
Because gold in sterling terms, gold in euro terms, gold in yen terms, gold in Swiss franc terms keeps making new highs. I'm not smart enough -- and maybe when I trade another 10-15 years I'll be smart enough -- to be able to make a better answer to you. But the only answer that I can understand is that anyone who is short of gold in foreign currency terms is losing a lot of money. Anybody who is long of gold in foreign currency terms is, on balance, making a lot of money.
What about the IMF releasing their tons of gold into the open marketplace, are you worried about that
Oh, I'm worried about everything all the time. Yeah, I'm worried about that. I'm worried about who might by it. I'm worried about the IMF selling it. I'm worried about where the gold is. I'm worried about everything. Do I lose sleep over it? No
But that's not changing your upward outlook for gold
No I think that gold ...
in terms of foreign currencies has been making new highs.
Even if the gold tons from the IMF get dumped into the open marketplace and no one buys it
That won't happen.
Do you have any speculation on who would buy it?
Why do you think they haven't bought it already
Because they don't feel any compulsion to have to do it yet. It's probably China, but China is very good at trading ... It's not going to tell anybody that it wants to buy it, it's going to tell everybody that it doesn't have any need or interest in owning it.
Then that's just about the time they'll buy it. If they don't buy it, someone else will. Is it possible we could walk in one day and see gold down $30 on an announced IMF sale of the last 200 where no one showed up? Sure, it's possible. Sure, it's very possible. Do I think it's probable? No, not at all.
Written by Alix Steel in New York
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.