Now, Dennis Gartman, publisher of The Gartman Letter, writes that gold bugs who have operated on the thesis that the Fed has lost control of money supply are in tatters.
He also says the only hope for them is that the FOMC of 2013 will be more dovish than last year's FOMC:
"Commodity prices are falling and in some instances are falling quite sharply. Clearly that is the case with gold, for the minutes of the FOMC’s last meeting have shaken the hopes of the most violent “Gold Bugs” malevolently, and have shaken our gold position rather materially. We are, however, rather nicely insulated from the real damage being done to the simplistic gold bugs who have owned and who still own gold predicated upon their thesis that the Fed has lost control of the money supply. That thesis is now in tatters... or at least has been very badly torn in the past twenty four hours... following the single sentence from the Fed’s minutes noted at length above.
…Yesterday’s plunge has indeed left its mark and gold buyers in US dollar terms are going to have to prove the very merit of their case... and soon. Further, they are going to have to do so with margin clerks looking over their shoulders today. That is hardly the time to make one’s best case.
The game has changed for gold if we are to believe the minutes of the FOMC meeting, and at the moment we’ve no choice but to believe them. The only hope for the gold/US$ bulls is that the newly constituted FOMC shall be more dovish than was the FOMC as constituted last year. That case can be made, but only at the margin. We shall accept the FOMC of ’13 as more dovish than was that of ’12, but only marginally so; not materially so."
Gartman owns gold in euro and yen terms. Gold is off 1.4 percent today.
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