Why the Gold bull market is dead and headed to $1475/oz
NEW YORK (Commodity Online): After admitting earlier that he had liquidated his Gold positions, Dennis Gartman has stated that the gold bull market is dead and quotes the market's inability to positively react to bullish reports as a reason.
In his latest newsletter, Gartman states that he is seeing “the beginnings of a real bear market, and the death of a bull”. As for the reason for his belief, he explains that China has been aggressively buying gold for the past weeks. In such a situation, prices should have surged.
"Instead they plunged. One of the oldest rules of trading is simply this: A market that cannot or does not respond to bullish news is a bearish market not a bullish one”
“So much damage has been done to the psychology of the market in the past week and so many late longs have been caught off guard that we think wholesale liquidation … and perhaps forced liquidation … shall be the outcome. We can imagine Gold trading back toward €1075-1125/oz and/or toward US$1475-1525.
It really won’t take much to push it there. Panic liquidation would do so rather swiftly. We’ll simply stand aside from the gold market then, preferring to be long of gold and not wishing really to be short of it. The sidelines seem the cozier of the two”, the letter states.
Dennis Gartman is the publisher of the widely read Gartman Letter and came into worldwide prominence after correctly predicting the commodities slump in 2008.