Volatility in commodities is coming back in a big way, said Dennis Gartman, founder of The Gartman Letter.
Commodities prices have been wavering in the recent weeks in response to changing economic outlooks, but some surprisingly strong earnings reports last week were enough to push oil and copper prices higher.
“I think there’s some speculation involved, but we have to remember that in the commodity futures market, for everybody who is long there is someone who is absolutely short,” Gartman told CNBC.
“So I think we get a little too concerned about whether speculators are in. If there’s a speculator buying, there’s a speculator selling.”
Despite the rising crude prices, Gartman said he doubts that the level will surpass $75 a barrel.
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“Gasoline is really the only price that consumers see on a consistent basis as they go in and fill up their tanks,” he said.
“When you start to get over $3, people have a propensity to stop buying. If you get back to $4, we clearly know that that’s the shutoff point.”
Volatility won't be "quite what we saw last July and August, but we're close," Gartman said.
No immediate information was available for Gartman or his firm.
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