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Did Dennis Gartman Move Out of Gold?


Dennis Gartman signaled a shift away from gold and into equities Wednesday, leading “Fast Money” traders to examine what it means.

Earlier in the week, the economist and publisher of The Gartman Letter suggested that stronger stocks would weaken gold.

“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.”


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On Wednesday, Gartman wrote that gold was no longer “monstrously” outperforming equity.

U.S. gold futures were around $1,736 in midday trading.

Trader Steve Cortes said it was significant if Gartman was getting out of gold, someone who “absolutely hit the gold call out of the park.”

“I think it’s also notable that silver has very much underperformed gold, and typically when silver lags gold, that’s a problem for both because it tends to be a bit more volatile,” he said.

Cortes said he believed the treasury market was correct.

“We have a 2 percent 10-year yield, is telling us that there is no inflationary threat,” he said. “If there’s not an inflationary threat then you don’t want to be long either silver and gold.”

Trader Pete Najarian said he saw positives in the data.

“If you’ve been positive and constructive on the market, you’ve been able to participate in the last 100 points or so of this S&P run,” he said.”This is a market where you are seeing some chasing going on because people were uninvested before.”

Najarian said it was important to keep an eye on the tipping point Steve Grasso suggested for an S&P 500 rally if it closes at 1,265.

Grasso said a 1,265 close could mean a run toward 1,300 or 1,325.

“You could have 2 to 4 percent moves in the blink of an eye and no one really even cares anymore,” he said. “You could also be back to 12¼.”

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Trader disclosure: On Dec 7, 2011, 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 C; Najarian is long JPM calls; Najarian is long WFC calls; Najarian is long MSFT; Najarian is long INTC; Najarian is long YHOO; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU; Lindzon is long LPSN; Lindzon is long AMZN; Lindzon is long INTU; Lindzon is long ARBA; Cortes is long Treasuries; Cortes is long INTC; Cortes is long KR; Cortes is long TSN; Cortes is short EUR; Cortes is short DB; Cortes is short XRT vs. S&P long

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