GARTMAN: In Four Decades Of Trading Gold, I Have Never Seen Anything Like This Crash
In the latest Gartman Letter he writes:
"We've traded gold for nearly four decades and we've never… ever… ever… seen anything like what we've witnessed in the past two trading sessions. Spot gold as we write is trading $1450/ounce in dollar terms and that is a rally, hard thought that might seem to believe."
On Friday, Gartman wrote that he was long of gold in Yen terms and that the "technical prospects for gold/U.S. dollars appears week." At the time he wrote if gold got to $1,555 it could unleash a "torrent of selling." Today he follows up on that:
"Never, however, did we think that gold would plunge by $100+/ounce, and certainly we did not believe that gold would fall by $150/ounce as it has thus far. We thought perhaps that gold might fall $25/ounce… perhaps $35/ounce... but never would we have imagined it selling down by this sum.
"The pressure now upon the likes of Mr. Paulson and others who are hugely net long of gold in various manners must be intense indeed. Their margin clerks cannot be amused and must indeed be wholly and utterly dismayed.
"We fear that when NY opens hours from now, and when the public sees the damage done to their accounts, there will be one more violent sum of selling that hopefully shall clear the decks. However, we cannot be certain that that is true and the “true believers” in gold are clearly under duress."
Many have said Cyprus is behind the rout in gold. In fact on Friday, the governor of the Central Bank of Cyprus said the government seemed committed to selling state gold without consulting with the central bank. From Gartman:
"We shall stand by our comments of late last week that if the Bank of Cyprus and/or the Treasury there is being forced to sell gold, then the other countries in trouble shall be forced to do the same. If Cyprus is forced to sell gold, then Portugal shall be too, otherwise the discrimination against Cyprus shall be wholly unwarranted and utterly unfair. And if Portugal is forced to sell, then how can Italy avoid the same fate... or Greece for that matter."