On Wednesday, investors who had recently put money to work in gold started wondering if they made a terrible mistake.
The precious metal fell off the face of a cliff, back below $1800 after peaking above $1900 just one day ago.
Like the traders so often says gold takes the stairs higher and the elevator down. At risk of being too irreverent, did gold bugs just step inside the express car down? Or is this the pullback that they’ve been waiting for – ahead of the next leg up?
According to strategic investor and commodities expert Dennis Gartman the sell-off is not a buying opportunity at all – the buying opportunity is behind us.
In fact, he thinks what’s happening right now is a classic sign of a top. “This was one of the great bubbles of our time.”
”I pay great attention to something technicans call an outside reversal – that is, the market made an all-time new high – closed on the lows of the day – then closed below the previous day’s lows. If you don’t pay attention to that and don’t liquidate you’re going to find yourself in a lot of trouble.”
In fact, Gartman is putting his money where his mouth is.
”I sold a lot of gold in the last 54 hours – I wish I had sold everything and I wish I was short.”
And he’s not alone. Trader Steve Cortes thinks the patterns in the gold chart now are eerily similar to those in 1980 – when gold completely topped out for years to come.
