Tags: Gartman | gold | China | Cyprus

Dennis Gartman: ‘Panic Is Everywhere’ in Gold Markets

By Michael Kling   |   Monday, 15 Apr 2013 12:14 PM

Gold prices are falling fast, alarming investors.

“There are a lot of people throwing up their hands — throwing positions overboard. Panic is everywhere,” Dennis Gartman, editor and publisher of The Gartman Letter, told CNBC.

“I’ve never seen anything like this. I mean it.”

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Gold fell below $1,400 on Monday, the lowest since March 2011 and 20 percent off its peak.

Speculators worry that Cyprus will have sell gold reserves to help pay for its bailout, Gartman noted.

“I think it would be unfair to force the Cypriots to sell and not to have others do exactly the same thing,” he said. “I expect Spain and Portugal, Italy will also be rumored to do it, and that’s weighing on prices.”

Stocks of gold mining companies fell around the globe, CNBC reported. Kingsgate Consolidated, an Australian firm, and Beadell Resources, dropped 15 percent. Newcrest Mining, fell 8 percent. In China, Zhongjin Gold was down 6.5 percent, and Zhaojin Mining was down 9 percent. Randgold Resources fell 7.2 percent, while Lonmin and Kazakmys were both down over 6 percent in the United Kingdom.

Citigroup put a sell rating on all but one U.K. gold miners.

But Jonathan Barratt of Barratt’s Bulletin, which focuses on commodities, called the drop a “significant over-reaction” and said it offers a buying opportunity, according to CNBC.

“For the amount of money that’s going into the system,” he said, “you have to take a longer-term view that stimulus will support gold prices.”

Lower-than-expected gross domestic product figures from China prompted fears that the Chinese would be able to buy less of the precious metal, according to The Wall Street Journal. A Goldman Sachs recommendation to short gold certainly didn’t help gold values either.

“The final straw came on Friday with the mere suggestion that the eurozone’s bailout candidates could help pay their own way by selling some of their own gold,” Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., told The Journal.

“There is no real culprit in the demise of gold other than massive liquidation amongst all of those who believed that concerted actions by central bankers around the world would stoke inflation,” Wilkinson said.

“The lack of evidence pointing to monetary price instability has left them wanting, yet worse still, searching desperately for a bigger fool to buy the same redundant argument.”

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