From today's Gartman Letter...... (1-12)

"Turning to the precious metals, we remain bullish of gold as we have for months, but we remain so in terms of the EUR, the British pound Sterling and the Yen. We have been unwilling to accept the risk of US dollar exposure attendant to owning gold in dollar terms, and that risk aversion has served us well for as gold broke more than 11% in US dollar terms in the December market-clearing correction, it fell by half that in EUR terms. In other words, rather than facing a material loss of funds that might have been debilitating, we lost a much more amenable sum which we far more readily survivable. Further, we reduced the intra and inter-day random noise that this market is prone to Given our antipathy to “noise,” we were well served.

As we write, gold is trading just under the psychologically important €800 level at €796.15, and a clear break upward through €800 would be most impressive. In £ terms gold is trading £715, and again we are much impressed. We’ll be even more so when gold trades upward through the last residual resistance at £740. Finally, gold is trading ¥105,939, marginally below where it was yesterday at this time. The trend is up, and if Mr. Kan has his way and moves to weaken the Yen relative to the US dollar we could see gold in Yen terms rush upward toward ¥110-115 thousand rather swiftly.

Finally, we noted here yesterday that gold had become perhaps the “third or fourth” reservable asset for the world’s central bankers. We were sort of wrong, for as one of our friends (who shall remain anonymous for corporate policy reasons) wrote to tell us… and he would know…

Gold is actually already the 3rd highest reserve asset I believe - ahead of JPY/GBP/etc..

http://www.imf.org/external/np/sta/cofer/eng/index.htm

According to this data (excluding China!) US$ [reserves] are US$ 2.7 trillion; EURs are US$ 1.2 trillion, and JPY are only US$ 143 billion (by the way GBP is 3rd at US$ 192 billion). Gold is US$ 972 billion (excluding China) or greater than all other currencies (GBP, JPY, CHF, and "others") combined. Pre EMU gold was bigger than any European currency except the DM.

So, we were almost right, and our thesis still holds."