Analysts talk gold at NYSE


* Insights, Excerpts, and Sound Bites from the Inside Commodities Conference – at the NYSE, NYC *

On the day after the Fed offered a $600 billion ‘freebie’ and eight more months of party time to the world’s carry dollar-carry trade, the who’s who of the world of commodities gathered at the NY Stock Exchange to discuss the present conditions and future prospects for the world’s markets in “stuff.” While watching metals prices gyrate has not been doable today, thus, we bring you a compendium of nuggets of wisdom from yesterday’s commodities event in the Big Apple. Hopefully, they will make for thought-provoking reading.


Dennis Gartman – The Gartman Letter

“There is no question that gold is catching on in the mainstream. Gold is also catching on in the sophisticated stream. We have institutional buyers of gold that five years ago would have never touched gold. And they are.

It’s just amazing to me how many junior gold miners are dens of thievery. They’re just one hype after another. Does one out of 100 work? Probably. But it’s not worth the [other] 99. The large group, the Barricks and the Newmonts, I don’t mind owning them as much. They’re leveraged to the price of gold. If you have to own equities, own them.

Markets are fundamentally driven, technically driven, and psychologically driven. At times, one of those three becomes the dominant factor. And when psychology becomes the dominant factor, you’re usually getting close to the time when a correction of some magnitude is not only warranted, it’s bloody necessary.

I will reiterate: I’m long gold. I’m still bullish on the gold market. I’m just demonstrably less bullish than I was, which, of course, will make me a disdainful, hated bear on gold. Hard to imagine that you can be bearish on something of which you are long.”

Arthur Cashin – UBS Financial Services

“QE2 is pushing on the law of diminishing returns. Bernanke offered the economy the Fed’s QE2 not because he wants (or cares about) the price of gold going up. QE2 – and I hope I am wrong – is trying to build up the stock market values. QE1 was like pushing on a string. QE2 is like pushing on a string with two fingers.

So, now, with the Fed’s efforts to push various asset prices higher and gold rising as a result of that, you have some people in government saying: ‘Why don’t we reap some benefits from all that gold in Fort, Knox?’ I think that Mr. Bernanke must be ready to have the [interest rate] ‘fire extinguisher’ right next to him, since ‘cooking with fire’ is always fraught with risks. That said, we are still facing more deflationary pressures than the opposite thereof, at this time.”

Dodd Kitsley – iShares / BlackRock

“ETFs have made gold accessible to a much larger audience. Strategic asset allocation models almost all include gold at this time. Gold has a valuable place within a well thought-out portfolio. Gold as safe-haven, gold as a portfolio diversifier, gold as an inflation hedge – these are all valid reasons to include a small allocation in bullion within a basket of assets.”

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