Gartman Cuts Gold Positions By Half
Published: Friday, 5 Aug 2011 | 11:13 AM ET Text Size By: Reuters
Independent investor Dennis Gartman on Friday said a bearish technical reversal and market preference for cash over riskier assets prompted him to cut his gold positions by half.
Gartman, who has long been bullish on gold priced in non-U.S. currencies, also cited unprecedented bullish gold investor sentiment, growing public speculation, and the metal's decline across all currencies on Thursday.
Thursday's record could mark bullion's highest level "for quite some long while," as prices ended at its lows and below the previous session's intraday lows, he said.
"In the past, this has always marked any number of various market highs and certainly we do not think that gold is any different. We are cutting our positions then by half this morning," Gartman said in his daily investment letter on Friday.
Spot gold [XAU= 1652.70 4.80 (+0.29%) ] recoiled from a record $1,681.67 an ounce in heavy volume on Thursday, as mounting recession fears fed a global stock market maelstrom that forced investors to liquidate bullion profits to cover losses elsewhere.
"Given the circumstances prevailing in a world that shall put a premium high upon liquidity, we think it is wise to liquidate our gold holdings ahead of everyone else," Gartman said.
Bullion rose 0.5 percent to around $1,660 an ounce on Friday, as investors jittery about a gloomy economic outlook sought a safe haven despite a better-than-expected U.S. payrolls report.
Gartman has been buying gold in non-U.S. currencies since mid 2009, when gold was still trading below $1,000 an ounce. He said that a growing public perception that gold is a safe investment also prompted him to lighten his gold investment.
"Gold is a fine trade, but gold is hardly 'safe.' Safety to use means a price that is stable, and gold is anything other than stable these days," he said.
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