Gold trend still up, base metals toppy: Gartman

By Carole Vaporean

NEW YORK (Reuters) - The price of gold should continue its uptrend, but base metals prices have mostly topped out, said independent investment manager Dennis Gartman on Tuesday.

Speaking at the Reuters Investment Outlook Summit in New York, Gartman said he uses the price of gold as his main inflation gauge.

"What do I look at? If I'm only allowed to pick one, let me look at the price of gold," said Gartman, publisher of The Gartman Letter, a widely read investment advisory newsletter.

Gartman said he sees the uptrend of the last six years continuing because of "too rapid growth of the monetary aggregates in too many countries around the world."

While many gold bugs tend to take a perpetual doom-and-gloom view, Gartman said he does not share their view, but added, "I think gold is a really, really good mechanism for what inflationary concerns are."

Gartman does not tout gold as a must-have investment, but said the gold ETF, the exchange-traded fund that allows investors to participate in the gold run-up through a fund, is a great trading vehicle.

"Right now I'm modestly bullish of gold, I'd rather buy it than sell it, but am I going to be actively doing that? No."

He said he has had the same trade on for three years in which he holds a long gold and a short oil position.

"I think gold is cheap in terms of the number of barrels of crude oil it buys. But does that mean I'm bullish of gold and bearish of crude? No. It just means that relative to each other I have a view," he said.

Though Gartman said he does not have a price target for gold, he believes it is still on the upswing.

"Over the course of the last five years, gold is going from the lower left to the upper right (corner of a price chart). And you want to buy things that are going from the lower left to the upper right and most people forget that," Gartman said.

As for gold, he said, "The highs are higher and the lows are higher. In that instance, one should tend to be a buyer of weakness and not a seller of strength," he said.

"The best you can say is "that looks like it's going up. You should probably buy it," he added.

As for base metals, he said he thinks most prices are "sporty" and have already topped out.

"I understand the cases for demand, but I'm not overtly bullish of the base metals after the run that we've had."  Continued...