The most important factor impacting the price of gold currently is the ongoing set of problems with the euro currency, according to long-time commodities investor Dennis Gartman.
In a telephone interview with Bloomberg, the author of The Gartman Letter stated that “The driving force in the gold market is the problems in the euro. Central banks in Europe and individuals will want to lower their euro holdings and buy gold since no one knows what is happening to the euro.”
Gartman went on to predict that “The euro is heading towards parity once again,” meaning a 1:1 ratio against the U.S. dollar.
The euro last reached parity versus the greenback in 2000, and hit a five-year low of 1.1874 in May 2010 when the sovereign debt crisis in Greece first rattled financial markets.
In the shorter term, Gartman suggested the euro may fall to 1.30 against the U.S. dollar; it is currently at 1.3771 in Friday afternoon trading. Gartman did not provide a specific gold price target, however.
The euro-denominated gold price reached an all-time high €1,374.76 on September 12, 2001 and is presently trading at €1,276.90 per ounce.
Premier Gold Expands Footprint in North America
- Upon completion of Phase I, Premier will be entitled, but not obligated, to enter into a joint venture agreement with LKA and earn up to a 60% interest in the Golden Wonder by spending $15 million in mine exploration and development over an additional six-year period
- Premier may accelerate the earn-in period at its option
- If Premier elects to fund exploration beyond Phase I, it will be required to make certain payments (cash and stock) and reimbursements to LKA as part of its initial earn-in obligation
