Gold Selling “Malevolent Force”? – Dennis Gartman

By: GoldCore

Dennis Gartman, author of the institutionally well followed ‘The Gartman Letter,’ has asked questions about gold’s peculiar price action last week and raised the question as to whether there was official central bank manipulation of gold prices.

Gold was 2.4% higher in October but fell 2% last week as the Fed again suggested they may soon increase interest rates. Gartman’s assertion is significant as he is no so-called ‘goldbug’. In fact, he is the darling of Wall Street, Bloomberg, CNBC and is highly respected and followed by large hedge funds and financial institutions.

Gold in USD – 1 Month

He has been bearish on gold in recent months but the recent turmoil in currency markets has Gartman bullish on gold also in dollar terms since August.

“I think for the first time in a while, you can actually say the lows may have been in dollar-dominated gold,” Dennis Gartman told CNBC’s “Fast Money.”

Gartman is on record regarding his belief that gold is in a long term bull market in all currencies.

Here is the key extract regarding potential gold manipulation from the Gartman Letter on Friday:

“As for the precious metals, the selling late Wednesday and all day yesterday was indeed severe, and even our positions in gold/euro and gold/yen have seen severe damage wrought upon them.

We find it hard to believe that the mere suggestion by the Federal Open Market Committee in its post-meeting communique on Friday that “liftoff” on the overnight Fed funds rate may take place at its December meeting can be responsible for this sort of egregious, serious, and now relentless selling, and we are almost of the mindset associated with the likes of the gold bugs and GATA that some malevolent “force” was behind the selling.

However, we are not going to travel down that road at the moment and sit tight with our positions, believing that the continued “experiments” with QE undertaken by the Bank of Japan and the European Central Bank shall work to the detriment of their currencies and to the support of gold. Nonetheless, the last 36 hours have been terribly dismaying …”

GoldCore Note: As ever, we view such manipulation as an opportunity for investors as it allows them to accumulate gold at artificially depressed prices.

The history of manipulation of the gold market is of short term success followed by ultimate failure and then much higher prices as was seen after the failure of the “London Gold Pool” in the late 1960s and gold’s massive bull market in the 1970s.

The golden beach ball has been pushed near the bottom of the ‘gold pool.’ The lower it is pushed in the short term, the higher it will surge in the long term.

DAILY PRICES
Today’s Gold Prices: USD 1135.80 , EURO 1030.86 and GBP 733.86 per ounce
Friday’s Gold Prices: USD 1147.75, EUR 1042.70 and GBP 748.04 per ounce.
(LBMA AM)

Gold closed at $1141.50 on Friday a loss of $4.30 and  -1.98% overall for the week.  Silver lost $0.08 to close at $15.52, showing a -2.14% loss for the week.   Platinum lost $6 to $982.

Gold fell 2% last week as the Fed again suggested they may soon increase interest rates. However, it was 2.4% higher in October due to strong demand for physical gold bullion globally and especially in Germany, India and China.

We are now entering gold’s seasonal sweet spot from early November to the end of February as we enter the Indian festival and Chinese New Year periods.

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This update can be found on the GoldCore blog here.

Mark O'Byrne

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

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