Wednesday November 09, 2016 13:24

(Kitco News) - The world is going to have to relearn the lessons of the 30's all over again, said market watcher Dennis Gartman in a note to Kitco News.  “Trade protectionism will run amuck and gold will soar even more than it has thus far I'm afraid,” Gartman said in an email to Kitco News post Trump victory.

“[W]hat can one say other than wow! The gold market… and the silver market too… have soared on the news of Mr. Trump’s victory, although both have come back from their highs made earlier in the evening,” he wrote in his Wednesday edition of the popular Gartman Letter.

The problem gold shall face is that although the political confusion that a Trump Presidency provides shall of course be supportive of gold, the implications of trade protection and rising tariffs are massively deflationary and thus detrimental to gold. For now, the former obtains; it may take a day or two or three or more before the latter has some effect,” he said.

He added, “We shall sit tight with the position we have in place as a result of the move and the election news, but it shall take a clear, definitive move on the part of Gold/EUR upward through €1200/oz. to bring us to add to our position. Sitting tight seems reasonable for the moment anyway."

Gold futures managed to rally to nearly two-month highs on the back of an equity selloff as election results started to roll in, calling for a Donald Trump presidency. Now that investors have digested the election results, gold prices have come off their highs with December Comex futures relatively flat on the day, last trading at $1,275.70 an ounce.