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Dennis Gartman: Strong Stocks May Weaken Gold

If the stock market continues to climb, will gold continue to fall?

As U.S. gold futures dropped $16.80 Monday, closing at $1,734.50, investment pro Dennis Gartman said that’s exactly what’s happening.

“It’s interesting to see that gold had been gaining upon stocks for a long period time, and suddenly over the course of the past three weeks, four weeks or so, gold began to weaken,” he said. “I think what we have going on here is, as the year is coming to an end and as a lot of stock portfolio managers, who do own some gold, find themselves behind benchmarks. I think you saw them today swapping out of gold, moving into the stock market.

“This may be something that prevails for the rest of the month,” he added.

Trader Tim Seymour asked if platinum should outperform in light of projections of record auto sales wordwide in 2012.

Platinum is a crucial component in its manufacture.

“We need to pay more attention to what’s going on in catalytic converters,” Gartman said. “I’ve been toying with the idea of owning platinum, being short of gold.”

He added that even so, he wasn’t ready to make that trade.

In response to a question about silver from trader Stephen Weiss, Gartman said platinum and palladium were better trades.

“I don’t trade silver,” Gartman said. “The volatility of silver scares me just too much.”

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Trader disclosure: On Dec. 5, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders:

Seymour is long AAPL; Seymour is long MCD; Seymour is long RIG; Adami owns C; Adami owns GS; Adami owns INTC; Adami owns MSFT; Terranova is long EMC; Terranova is long SU; Terranova is long NCR; Terranova is long UPC; Terranova is long TRLG; Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long AXP; Terranova is long IBM; Terranova is long HES; Terranova is long CAT; Terranova is long SWN; Terranova is long CNI; Terranova is long DECK; Terranova is long SBUX; Nathan has Dec put fly AAPL; Nathan has Jan put spreads MS; Nathan has Jan call fly NFLX; Nathan has Jan put spreads INTC; Weiss is long QCOM; Weiss is long MOS; Weiss is long EUO; Weiss is long DE; Weiss is long CNX; Weiss is long COP; Weiss is long CSC; Weiss is long VZ; Weiss is long KO; Weiss is long MDRX; Weiss is long SHAW; Nations is long SPY; Nations has long call spreads AMZN; Nations is long MSFT; Gartman is short EUR; Gartman is long X; Gartman is short AMZN; Dicker is long RI

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