After moving to the sidelines earlier in the month, on Friday, commodities investor Dennis Gartman said it's time to take the plunge and go long gold.
“I’ve been out of gold for a period of time but I’m pulling the trigger – I want to come back to gold.”
Gartman’s call is both technical and fundamental.
Looking at the technicals, he likes the price action. “Gold consolidated for two weeks, but it just sat there; it didn’t give anything back. That means resistance that might have been a ceiling has been taken out.”
And Gartman says the fundamentals are bullish, too. Specifically, he expects demand to increase as investors seek the yellow metal as an alternative reserve currency. “What the Fed has done,” he explained, “and what the ECB must do will support gold relative to other currencies."
In other words, Gartman thinks moves to stimulate Western economies will debase currencies and as a result make gold all the more attractive.
“Monetary authorizes have made it clear they’re expanding supply reserves in the system – respond accordingly.”
It's worth noting, if you’re a nimble money pro, Gartman suggests playing the theme in euro terms. (In other words, a long position in gold versus a short in the euro.)
“I think gold goes to 1400 versus euro, that’s an 8% move higher," he says.
However, if you're an individual investor, Gartman thinks it's perfectly fine to establish a long position in dollars. "It probably gains about the same in dollar terms,” he adds.
And if you're thinking about buying the gold miners on this thesis - Gartman has some thoughts -- don't do it !
“Make a pure bet, buy the metal” he says,. "If you buy miners you can walk in and find out the company had a labor problem or the mine flooded. Miners will eventually outperform but I’d make the pure bet.”
What do you think? We want to know!
Got something to to say? Send us an e-mail at firstname.lastname@example.org and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to email@example.com.
Trader disclosure: On Jan 27, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns WFT; Grasso owns XLU; Karabell is long HON; Karabell is long CAT; Karabell is long QCOM; Karabell is long BIDU; Karabell is long VMU; Karabell is short JCP; Karabell is short XLF
For Steve Grasso
Stuart Frankel & Co and it’s partners own CSCO
Stuart Frankel & Co and it’s partners own CUBA
Stuart Frankel & Co and it’s partners own GERN
Stuart Frankel & Co and it’s partners own HPQ
Stuart Frankel & Co and it’s partners own HSPO
Stuart Frankel & Co and it’s partners own MU
Stuart Frankel & Co and it’s partners own NYX
Stuart Frankel & Co and it’s partners own PRST
Stuart Frankel & Co and it’s partners own WFT
Stuart Frankel & Co and it’s partners own XRX
For Patty Edwards
Trutina Financial is long GLD
Trutina Financial is long PGM
Trutina Financial is long INTC
Trutina Financial is long T
Trutina Financial is long SBUX
Trutina Financial is long NOV
Trutina Financial is long SBUX
For Adam Jonas
(F) The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Adam Jonas.
For Jim Mccluney
For Willie Williams
For Jeff Klinefelter
A Piper Jaffray officer, director, or employee (other than a research analyst who follows J. C. Penney Company, Inc.), is an officer and/or director of J. C. Penney Company, Inc.
Piper Jaffray beneficially owns 1% or more of a class of common equity securities of J. C. Penney Company, Inc.
Piper Jaffray usually provides bids and offers for the securities of J. C. Penney Company, Inc. and will, from time to time, buy and sell J. C. Penney Company, Inc. securities on a principal basis.
For Dan Dicker
Dicker is long RIG
For Dennis Gartman
Gartman is long gold
For Anthony Scaramucci
Scaramucci is long C
Scaramucci is long BAC
Scaramucci is long GD
Scaramucci is long BDX
SkyBridge Capital Is A Fund Of Funds Manager
Anthony Scaramucci is one of 8 national finance chairs for Mitt Romney campaign
Held a fundraiser for Mitt Romney
Has contributed to the Romney campaign
CNBC.com with wires.