As gold prices dipped below $1,600 on Monday, commodities trader Dan Dicker said it could be time to buy.
“We haven’t seen the drop in gold that we’ve seen in some of these other commodities,” Dicker, president of MercBloc, said on “Fast Money.” “We’re really looking at something that came from $1,760 down to $1,500. That is not an enormous drop.”
While gold broke below its 200-day moving average last week, Dicker said that historically the technical number isn’t a good indicator at all.
“I think you have to look at it as a different classification than the base metals, for example,” he said.
U.S. spot gold traded at $1,597.89 per ounce midday, while gold futures dipped to $1,593.30.
Recent swings in gold prices have led to predictions that gold prices would fall to $1,000 or rally to $2,500 next year.
Dicker added that price pressure on gold came from minor hedge fund selling “to capture that one winner that they’ve had this year, and that’s been the gold trade.
“To a large degree, that to me sets up a buying opportunity,” he said.
“Talk about the GLD, an ETF, for example, which, when gold goes down, would normally — if they can’t find buyers — would have to slough off actual physical bars. They haven’t had to in this whole downtrend, and that to me indicates there are buyers out there. And if there are buyers out there, that means that gold needs to be bought somewhere down here,” he said.
However, Dicker shied away from recommending gold as a move in a wide stock market sell-off.
“Unfortunately, it’s not the safe haven trade you could be looking for,” he said. “There’s really only one place to go and that’s treasuries, and as we know, that one is really, really crowded.”
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Trader disclosure: On Dec. 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami owns AGU; Adami owns MSFT; Adami owns NUE; Adami owns BTU; Adami owns C; Adami owns GS; Adami owns INTC; 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;
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