Gold set both a monthly high — and low — Wednesday, catching renowned commodities trader Dennis Gartman seemingly by surprise.
“This was really quite a day,” he said. “It’s one of those days when you say, ‘I don’t know what’s going on, but I’m selling some,’ because you have no choice. The next thing you know, it’s down $35.”
Gartman, who sold off some gold, pinned gold’s wild ride to a “lack of affirmation” from Federal Reserve Chairman Ben Bernanke that a third round of quantitative easing was forthcoming.
“Gold needs consistently easier monetary policies to push higher,” he said on “Fast Money.”
U.S. gold futures dropped more than $91, or 5 percent, to close at $1,698.80 per ounce. Spot gold traded down almost 3 percent at $195.56.
“When I see daily reversals, a new high and taking out the previous day’s low, I pay attention. When I see weekly reversals, I really pay attention. When you see a monthly reversal, if you don’t pay attention, you’re an idiot,” he said. “I think you have to be pay attention. I think there’s probably going to be more liquidation.”
Gartman reduced his long gold positions in euro and yen terms.
“Do I wish I had sold my entire position and gotten short? I’m not that quick,” he said. “I feel like I had a good day by mitigating losses.”
Joe Terranova of Virtus Investment Partners also saw a downward trend ahead.
“The price action tells me today a lot of folks who were long are getting out, going home tonight short both silver and both gold,” he said. “I think those are the right trades.”
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Trader disclosure: On Feb. 29, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Najarian is long (AAPL); Najarian is long (INTC); Najarian is long (YHOO); Najarian is long (HPQ); Najarian is long (MSFT); Najarian is long (JOY); Najarian is long (SLV); Finerman is long (AAPL); Finerman is long (JPM); Finerman is long (HPQ); Finerman is long (NTAP); Finerman is long (GLUU); Finerman is long (IWM) Puts; Finerman is long (.SPX) Puts; Finerman is short (SPY); Finerman is short (MDY); Finerman is short (IWM);
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