Dennis Gartman today addresses the correction in gold which will without a doubt wet the appetite of central banks looking to add it to its reserves.
In The Gartman Letter this morning, Mr. Gartman — with Gold continuing its correction, dipping below the $1140 level this am — predicts the appropriate price for the precious metal to be in the $1025 to $1065 range:
Businessinsider: “The Gartman Letter: Gold in US dollar terms, having run from $900/oz in August to $1225 late last week, is long overdue for a correction, and it is suffering through that correct with a sense of seriousness. Late longs have been treated quite roughly in the past week, and given the near parabolic nature of the rise throughout November, no one really should be surprised.
We look for support for gold into what our long standing clients know that we shall call “The Box”… late level on the chart that marks the 50-62% retracement of the previous move. In this case that argues for gold in US dollar terms to fall toward the $1025-$1065 range. Thus, we must understand that gold could indeed fall to those levels and do nothing… absolutely nothing… to the major bull market’s trend, other than cause a great number of ill-capitalised gold owners to throw their positions overboard. Or more properly, to have had their gold positions thrown overboard by zealous margin clerks intent upon keeping their firms’ capital intact. That is the duty of the margin clerk, and she does her job well.”[emphasis added]