LONDON (Commodity Online): The world’s central banks to collectively remain buyers of gold, describing the yellow metal as a “currency” competing for “space” on the balance sheets of the world’s reserve banks, said the Investor and newsletter writer Dennis Gartman.
He rhetorically asks “what one might do” if a reserve banker responsible for a nation’s monetary reserves.
“Clearly, given the current political turmoil in Europe, the movement of reserves into European debt would seem far too speculative in nature, for if one were right and the notes or bonds of Germany/France/Spain/Greece were actually to prove wise, the increased two or three hundred basis points earned in yield might be nice but is that worth risking one’s job and one career for. Would it be worth the risk of default?” Gartman added.
The debt of the U.S., Canada, Australia and New Zealand might be more likely to be paid in full but would earn less. The bottom line has been a trend by central banks out of euros into gold in recent years.
“They are choosing gold and their choice has been rewarded. Now, they are choosing gold at the expense of the yen and for the past several months that choice too has been rewarded. It shall likely continue to be,” Gartman continued.
Gartman favors trading gold in non-dollar terms and he is currently focused on gold in yen terms.
