Though noted commodities trader Dennis Gartman on Thursday admitted gold is stuck in a bear market, he still remains bullish on the precious metal in terms of yen and even recommends investors start up a small position.
"I like gold in terms of yen, not in terms of dollars, and it's predicated on the fact that the Bank of Japan has made it abundantly clear under Abenomics that they're going to expand the supply of Japanese reserves in the system aggressively. That should lead to some inflation and that will tend to help gold in yen terms, but gold in dollars? I could really care less about it," said Gartman, founder, editor and publisher of the widely read "The Gartman Letter" on CNBC's "Closing Bell."
Paul Sacks, principal gold trader at Aurum Options, agreed with Gartman that it's important for investors to own some gold. But he sees major headwinds for the yellow metal.
"If you're trading gold short-term, you're basically engaging in this game of when the QE tapering will come. … But most market participants do think it's coming and if it is, then you have to have a bearish mindset for gold," Sacks said. "It's in a bear market. It's a very dangerous place to try and find a bottom and catch a falling knife."
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Though Gartman acknowledged that gold has been under pressure for some time, he said owning gold in yen terms has minimized loses. Owners in terms of dollars have suffered much bigger losses, he said, adding, "That's a completely different game."