From today's Gartman Letter...... (9-3)

"Turning then to gold, we note firstly that gold is breaking out to the upside in the case of all currencies. AS noted above, it matters not whether one measures the price of gold in Rubles, Rupees or Renminbi, it is higher and it is rising. We are presently long of a good deal of gold, but we are long of it predicated in EURs and Sterling, noting that gold has broken out to the upside from recently well defined consolidation patterns in both instances. As we writ e, gold in sterling terms is trading £600, an obvious psychological level of resistance… sort of. In reality, as evidenced by the chart at the upper left of yesterday’s TGL, the real resistance is not likely until new and higher highs are made, above the high of £700 made in March of this year when panic was in the capital market’s streets as stock prices were plunging and the world looked rather bleak.

Our target for gold/Sterling is therefore at least £750 and so the question before us is whether we buy more now or shall we wait for a one or two day consolidation of the recent rise. We’ suspect the better course of action is to wait for gold in US dollar terms to push upward through $980 and for it to do so for an hour or two in order to prove the merit of the trade… which should coincide with a clear push upward for gold/Sterling through £700, at which point we’ll act, buying yet another unit of the trade. Do we risk paying too much by waiting? Of course we do; but in the greater scheme of things, and if the tectonic plates really have shifted as we discussed above, the waiting will prove immaterial."