It is a trend that is catching on. First China bought gold from the International Monetary Fund, then it was the turn of India. Now, Sri Lanka has jumped onto the bandwagon.
Countries are buying gold like there is no tomorrow.
Sri Lanka’s central bank said it had been buying gold to diversify its reserves amid volatile currency markets, days after India announced it had purchased 200 tonnes of the precious metal, by doling out hard cash. (Link)
Dennis Gartman, founder of The Gartman Letter, told CNBC Monday that the price of gold will “continue to go up until it stops.”
“It is a gold bubble and to say otherwise it’d be naive,” Gartman said. He called the trade on the precious metal: “mind boggling and unbelievably crowded,” but also said he is currently long — or betting gold will go higher.
According to Gartman, gold’s Friday low of $1,102/oz is the floor. If it breaks that support, he suggests investors should “head to the sidelines.”
When asked for a proper place where to put money as a hedge against inflation if it’s not gold, Gartman tipped Canadian and Australian currencies.
“If you’re going to be any place, be there,” Gartman said.
Australia’s central bank has already raised interest rates twice in the last couple of months and Canada is preparing to hike its key lending rate, he said.