Gartman: Three Reasons Why Gold Is Going Lower
By: Lawrence Lewitinn | CNBC Producer
- No more easy monetary policy:
Gartman says: "Gold needs 'fuel' – and lots of it – to move higher. That fuel is easy monetary policies. The Fed has signaled that its era of easier policies is ending and hence the 'fuel' is being reduced."
- Other commodities are falling:
Gartman says: "Gold also needs help from other commodities to 'fuel' inflation and that is simply not coming from the commodities markets. The grain markets are at best moribund and the energy markets are stable, with crude rising while natural gas is falling."
- Margin calls:
Gartman says: "Gold has problems with 'margin calls' in the immediate future. Stock prices have weakened and margin clerks look to gold as a mean to raise liquidity."
[Disclosures: As of the time of this taping, Dennis Gartman is short gold while his fund in Canada is long gold.]
Gold is down more almost 24% this year. Dennis Gartman, Founder and Publisher of the Gartman Letter, says the worst is yet to come.