Dennis Gartman, Founder and Publisher of the Gartman Letter, has some thoughts on gold and gold bulls.
Dennis Gartman, Founder and Publisher of the Gartman Letter, thinks gold is going down.
“People forget that the high in gold is now almost two years behind us,” says Gartman. “We’ve broken all trend lines. We’ve broken all support. Gold, in dollar terms, is a broken commodity.”
To those cheering on the yellow metal, Gartman has bad news. “It’s probably going to head lower, not higher, despite all of the news that the monetary authorities are expanding the supply of reserves to the system,” he says. “Every gold bull knows that. Every gold bug reiterates that. Every gold bug continues to buy gold. And, they continue to lose a lot of money.”
Gartman has particular levels he’s watching. “The first signs of support may well be $1,200. If it starts to break under $1,200, I’m sorry but there’s not much support until you do get to $1,000,” he says. “The trend seems to be downward and those who are buyers find themselves in a very uncomfortable position.”
“Like an aging athlete, [gold] just keeps faltering. It cannot just quite get across the line to catch that pass any longer than it used to be able to do very readily,” says Gartman. “Even with all of the news that is supposedly as bullish of gold as you can get – a weakening dollar at times, continued monetary expansion by every central bank in the world – gold can’t rally.”
What’s a gold bull to do? Gartman has an idea.
“The oldest rule in commodity trading is, when something can’t rally when the news is bullish, it’s a bear market.”