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As Spain Denies Bailout Story, Gartman Urges Everyone to Own Gold

The spot price of gold gained to $1,781 per troy ounce ahead of the trading
session in the U.S. on Wednesday with quiet intraday trading changing prices little as
stocks were broadly flat and the euro reversed earlier gains on analysts speculating on
whether Spain will request a bailout.

Silver prices gained briefly above $34.90 per troy ounce before retracing as other
commodity prices drop and British bonds and German bunds gained.

Axel Rudolph, senior technical analyst with Commerzbank, said his firm does
not believe at the current stage that another significant upside move for gold will be seen
before consolidation. He stated this means a move in the gold price above the $1,900 per
troy ounce level. He added that $1,851 might be attained, however.

September witnessed the European Central Bank unveiling an unlimited
sovereign bond-buying program called Outright Monetary Transactions. In the same
time period, the U.S. Federal Reserve announced a similarly open-ended third round of
quantitative easing.

Gold prices have gained nearly $100 per troy ounce since the beginning of
September, as the US Dollar Index, a measure of the dollar’s strength against a basket of
other currencies, dropped by more than 2 percent from August 31, when Fed Chairman
Ben Bernanke hinted at a third round of Quantitative Easing at the annual Jackson Hole
conference.

Dennis Gartman, a well-known investor and publisher, told CNBC Tuesday
that gold is just another currency and it is doing well in other currency terms. He added
that he is not a gold bug and he does not believe the world is coming to an end, but he
believes everyone needs to own some gold.

Gold prices in U.S. dollars hit a 2012 spot market high in earlier trading in the
week, touching $1,791 per troy ounce, though it has been trading in a much narrower
range over the past two weeks.

Jeremy Friesen, a commodity strategist at Societe Generale, said we are going
through a bit of a consolidation period in the market. He added his suspicion is that we
will see more monetary policy responses from other central banks as the Fed program
kicks off and the ECB program starts, which he believes will probably happen by the end
of the month. He said that is bullish for commodities like gold.

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