Tags: Dennis | Gartman | Gold | Price | Drops

Dennis Gartman: Get Out of Gold Before Price Drops

Tuesday, 25 May 2010 08:25 AM

Gold investors should dump the precious metal right away since prices will start to drop, says Dennis Gartman, hedge fund manager.

"(W)e are traders here, not investors, and traders listen to and watch the market, looking for signs of a changing environment," he says.

"The environment has been changing; violence and volatility are everywhere. We want out. The sidelines look inviting.”

Once gold prices get to its technical top, the value of the precious metal will start to decrease, said the author of The Gartman Letter in a note to clients.

Although the pullback may only be temporary, he said gold has “gone parabolic” and needs to be divested.

"We want out ... entirely," he says.

Gartman remains a gold investor using various strategies, CNBC reports.

The investor has a holding consisting of 15 percent gold in his currency portfolio, with equal parts in the yen, euro, sterling and Swiss francs.

Gartman said he is also long 10 percent silver and 15 percent each of Canadian and Australian dollars. However, he is short 15 percent apiece in yen, euros and sterling.

He advises investors to place their money in other precious metals.

“As noted recently, perhaps buying steel and buying gold, or buying copper while buying gold, or buying stocks while buying gold ... all positions that shall benefit from what we are calling the 'Zimbabwe-isation" of the capital markets in Europe," he writes.

Other banks also believe gold prices will drop to a mere $800 an ounce, Fortune reports.

Gold recently traded at about $1,192.60.

Barclays Wealth in London has predicted gold will drop to 800 an ounce by 2012. Societe Generale, the French bank, said the pullback will occur by the end of 2010 and gold will only be $800.

But not everyone follows Gartman's glum path for gold.

Billionaire commodities magnate and Tigris Financial Group head Thomas Kaplan reportedly has gone all in on gold. "I've reached a point where I feel the only asset I have confidence in is gold," Kaplan says.

Reflecting his conviction that global economic instability could bring rising demand for gold, Kaplan has gone further than perhaps any other major investor, betting the majority of his wealth on gold and other precious metals.

"You've got a perfect storm with no apparent solution," he told The Wall Street Journal.

"If the world does well, gold will be fine. If the world doesn't do well, gold will also do fine … but a lot of other things could collapse."

Though he won't disclose how much physical gold he owns, Kaplan, controls up to 30 percent of the shares in some so-called junior miners. Together, his holdings amount to a nearly $2 billion bet on gold, more than the Brazilian central bank's bullion is currently worth.



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Gold investors should dump the precious metal right away since prices will start to drop, says Dennis Gartman, hedge fund manager. (W)e are traders here, not investors, and traders listen to and watch the market, looking for signs of a changing environment, he says. ...
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2010-25-25
Tuesday, 25 May 2010 08:25 AM
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