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Dennis Gartman: Gold Remains Strong for Quite Some Time

Gold hit new record highs on Wednesday and silver climbed to its best level in 31 years as investors poured money into these safe havens, worried that tensions in the Mideast had neared a boiling point.

The United States has moved warships toward Libya with NATO allies considering a "no-fly" zone over the nation. Meanwhile, Secretary of State Hillary Clinton said Wednesday, "One of our biggest concerns is Libya descending into chaos and becoming a giant Somalia."

Considering the tense state of affairs, how should you put money to work in metals?

In a live interview on CNBC’s Halftime Report, commodities trader Dennis Gartman reminds the desk that right now it’s important to differentiate between trading commodities from investing in commodities.

If you’re a long-term investor Gartman thinks what matters most is the long term trend. And in most commodities long-term charts go from the lower left to the upper right, a bullish trend. “Weakness is to be bought. Strength, however is not to be sold,” he says.

In other words, long-term Gartman is bullish commodities and relentlessly bullish of gold.

“Gold has become the world’s second most reservable currency. It’s gaining relative to the euro and yen. It’s quite strong and will likely continue to be for some time to come,” Gartman says.

However, if you’re a trader and have a short-term time horizon, then Gartman’s counsel is a little different.

He says, “The markets are involving a lot more people then they used to – the public tends to speculate on the long side and they get aggressively long at the tops and they get washed out."

Because of the phenomenon, Gartman believes “corrections will be swift and violent." In fact we just had a correction in many of the grains - "it lasted a grand total of 48 hours," says Gartman.

If you’re a trader who trades futures contracts Gartman tells the desk after the recent sell-off, “if corn comes down another day – I’m a buyer of the weakness".

And if you’re looking for the short-term trade on gold, " in a Reuters interview Simon Weeks, head of precious metals at the Bank of Nova Scotia says "I think we see $1,450, and that's probably enough. Any good news from the Middle East will see a pullback to $1,400."



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Trader disclosure: On Mar. 2, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (F) bonds. Pete Najarian owns (GM). Pete Najarian owns (MS). Pete Najarian owns (JPM) calls. Pete Najarian owns (C). Pete Najarian owns (BAC) calls. Pete Najarian owns (GE). Pete Najarian owns (MU) calls. Pete Najarian owns (TCK). Steve Cortes owns (EXC), (SDY) and (PM). Steve Cortes is long Crude. Steve Cortes is short (QQQQ).

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BRIAN KELLY
Accounts Managed By Kanundrum Capital Own Oil Futures
Accounts Managed By Kanundrum Capital Own Corn
Accounts Managed By Kanundrum Capital Own Wheat
Accounts Managed By Kanundrum Capital Own Soybean Futures
Accounts Managed By Kanundrum Capital Own US T-Bond Futures
Accounts Managed By Kanundrum Capital Own Copper Futures
Accounts Managed By Kanundrum Capital Own (TLT)
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (SPY) puts
Accounts Managed By Kanundrum Capital Own (ATW)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (EBAY)
Accounts Managed By Kanundrum Capital Own (GLD) calls
Accounts Managed By Kanundrum Capital Own (SLV) calls
Accounts Managed By Kanundrum Capital Own The Euro
Accounts Managed By Kanundrum Capital Are Short US Dollar
Accounts Managed By Kanundrum Capital Are Short (XLF)
Accounts Managed By Kanundrum Capital Are Short S&P Futures
Accounts Managed By Kanundrum Capital Are Short The Yen

PATTY EDWARDS
Edwards owns (SPY) for clients
Edwards owns (XLB) for clients
Edwards owns (GLD) for clients
Edwards owns (SLV) for clients
Edwards owns (AMZN) for clients
Edwards owns (V) for clients
Edwards owns (JNJ) for clients
Edwards owns (AAPL) for clients
Edwards owns (MSFT) for clients
Edwards owns (GE) for clients
Edwards owns (TGT) for clients
Edwards owns (CME) for clients
Edwards owns (COST) for clients
Edwards owns (FXI) for clients

DENNIS GARTMAN
Funds Managed by Dennis Gartman are long Canadian Dollars, Australian Dollars, Swiss Franc, Gold, Corn, Soybeans, Sugar, Crude, Nat. Gas
Funds Managed by Dennis Gartman are short Euros, British Pound Sterling, Yen

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