Dennis Gartman: Gold Still Wants to Go Higher

With the dollar [.DXY  74.36    0.09  (+0.13%)   ] gaining as lawmakers inch ever close to a debt deal, is the gold [GCCV1  1622.80    1.10  (+0.07%)   ] trade over?

According to strategic investor Dennis Gartman the short answer is ‘no’ – he says gold still wants to go higher.

100 OZ GOLD DEC1 (GCCV1) 1622.80     1.10  (+0.07%%) CEC:Commodities Exchange Centre

Forget all the chatter about debt ceilings and S&P downgrades, Gartman tells us what matters most is that ”gold has become the third accepted reserve currency of the world,” and he doesn’t see any reason for that to change.

When you look at a long term chart of gold, like the one you see above, it goes from the lower left to the upper right and that's a bull trend.

However, as he says so often, Gartman prefers to play gold in euro terms or sterling terms rather than long gold in dollar terms. “Europe has greater problems than we have. We (should) reach a resolution to the debt crisis but Europe's problems (should) only get worse.”

And in the past Gartman has said the way for American investors to play his thesis, is to establish a long position in gold and pair it with a short position in the euro [EUR=X  1.425    -0.001  (-0.07%)   ] or a short position in the British pound [BPC1  1.6296    0.0004  (+0.02%)   ].

source: http://www.cnbc.com/