From today's Gartman Letter...... (1-8)

"Regarding gold, we remain quite bullish of it, but in terms of foreign currencies, not in terms of the US dollar, for we prefer hedging away the inherent dollar exposure incumbent in being long of gold in dollar terms. Too, we prefer the relative calm of gold priced in EURs, Sterling et al, for during the collapse that gold underwent relative to US dollars in December which ran to 10-11%, gold fell “only” 5-6% in terms of the EUR. That, we felt, was much more manageable. Further, even intra-day, gold priced in these other currencies is less volatile and its trend more readily discernible, allowing us to sit tighter, to breathe easier, and to remain more firmly committed to the long term trend.

Regarding the recent announcements of ETFs for platinum and palladium, we note one thing: there are already too many of them. It seems that not a day goes by without another ETF by another bank or broking firm being announced. As has been the case with gold, one of the ETFs already floated will likely trump all of the others and become dominant. Certainly we hope that that is true. Further, the advent of these ETFs will serve to tighten supplies of palladium more dramatically than the ETFs for gold, silver or platinum have done. Palladium mining is in the hands of rather few miners and its price is at a rather material discount to platinum given that the largest demand for both is in the form of catalytic converters on autos to control emissions.

Were there viable volume in the deferred palladium futures we would be actively seeking to buy near-er by futures and selling more deferred futures, looking for this market to move to a rather massive backwardation. We can recall several years ago when Tiger Fund took the palladium market to a truly awe-inspiring backwardation. Given rising auto production around the world, coming from the panic lows of last year, we can imagine this same backwardation developing. The question is, how to effect a trade predicated upon that notion?"