“The trend is up, the trend has been up for the last several months and I continue to think that as long as the monetary authorities are going to remain as expansionary as they are [this trend will continue],” the editor and publisher of The Gartman Letter said in an interview with CNBC’s “Futures Now” on Thursday. “Monetary expansion equals higher gold prices.”
Investors have flocked into the precious metal this year as the market continues to weigh central bank policies and volatility in equities. The flood of buying has gold tracking for its best start to a year since 1974.
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The precious metal got an even bigger boost Thursday, rallying 1 percent after European Central Bank President Mario Draghi cut interest rates but suggested he did not anticipate the need for rates to go negative any further.
“What Draghi said today turned the market,” said Gartman, also a CNBC contributor. “He has made it abundantly clear that he’s going to throw more reserves into the system. The Bank of Japan is going to throw more reserves into the system. And the Fed will have no choice to at least hold monetary policy steady, if not become more expansionary following what the leads are from the ECB.”
According to Gartman, all of those factors will continue to keep gold in the hands of the bulls. “Don’t fade this trend,” he added.