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Stay Nimble, Gartman Says Gold Catalysts Just Changed

Nimble [NIM-buhl]
adjective
quick and light in movement; moving with ease; agile; active; rapid

If there’s one thing that separates the pros from the amateurs – it’s the ability to remain nimble and move in and out of trades quickly and with ease.

And after Dennis Gartmanheardreports suggesting the ECB may buy the debt of both Italy and Spain – he told us exclusively that he was re-thinking his position on the gold trade – that he was inclined to again become bullish of gold .

In other words, Gartman is remaining nimble.

As you may know, Gartman made headlines earlier on Friday when he revealed in his widely followed newsletter than he had cut his position in gold by half.

Gartman had thought the trade was just too crowded.

He tells us, “too many people were involved in the gold trade. The public was enamored of gold. I heard talk of gold as a safe investment but gold is not a safe investment. Gold may be a safe harbor for a couple days but there’s nothing safe about it. When the public says I want gold because its safe you have to say it’s time to reduce your position.”

And Gartman stands by that thesis – he believes whole-heartedly that reducing his position was the right trade at the time.

But then circumstances took a hard turn and Gartman turned with it. ”Pros do that – when the facts change, they change.”

Just hours after he reduced his position in gold, he tells us that it may already be time to bulk up again and hit the buy button.

His decision was largely predicated on published reports suggesting the ECB had assuaged opposition from within – and intended to buy the bonds of beleaguered Italy and Spain (provided both nations agree to structural reforms.)

“If indeed the ECB is going to come in and quantitatively ease and monetize different kinds of debt – they will have to create reserves to do that. This could be QE-infinity,” he says, referencing the impact of the Fed’s bond buying on the US dollar.

In other words, the ECB development could send the euro sharply lower in the long-term. “And that would be bullish for the gold market.”

* You can find our conversation with Gartman about 7:30 into the clip above.


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