Last Updated : 01 November 2012 at 18:05 IST
Gold looks vulnerable, may crash if prices fall below $1700: Denis Gartman
Many analysts are bullish on gold on wrong reasons, money supply (M1, M2) is expanding but a more crucial variable, the Adjusted Monetary Base of US Federal Reserve remains sideways for the past 14 months,
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NEW ORLEANS (Commodity Online): Gold looks really vulnerable and could be heading for a crash if it breaks the $1700 support level, according to Denis Gartman, Editor of Gartman Letter.
Many analysts are bullish on gold on wrong reasons, money supply (M1, M2) is expanding but a more crucial variable, the Adjusted Monetary Base of US Federal Reserve remains sideways for the past 14 months, he told Daniela Cambone in an interview to KitcoNewsVideo.
US Federal Reserve is buying $45 bn worth Morgan Securities regularly but they are all nearing maturity and hence Fed is not over expansive as many analysts explain.
Gold could witness a sharp decline and once it stops, Gartman would start buying from that levels. Indian demand for gold has been weak this festive season on weakness in Rupee which makes it costlier to buy gold. However, if Indian demand picks up, then gold may turn bullish, Gartman said in the interview.
On Thursday, Comex Dec gold has gained close to $5 per ounce at $1723 in electronic trading and market looks uncertain ahead of US Presidential elections and US initial jobless claims, Consumer Confidence data due today. Meanwhile, China's Purchasing Manager's Index (PMI) rose to 50.2% in October from 49.8 in October showing that positive signs are emerging in the economy, analysts said. The PMI rebounded to 49.8 percent in September, ending four straight months of decline
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