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Beware This Gold Trade, Dennis Gartman Says

Gartman's Warning: Don't Buy Gold Coins!
Gartman's Warning: Don't Buy Gold Coins!

Small investors are piling into the gold trade, which would suggest a top. But that's not necessarily the case, commodities trader Dennis Gartman said Monday.

"I think you've got the public piling into gold, which happens, and we have to be careful because when the public comes into something, the pros tend to think, 'Well, that's the end of the move.' And the last time we saw gold coin sales of this consequence was actually in 2008, and gold moved from $900 an ounce, almost relentlessly, to $1,700 an ounce," he said.

On CNBC's "Fast Money," Gartman warned investors about one particular trade.

"I will counsel people to be careful when buying gold coins because the markup on gold coins can be preposterous, stupid, egregious, silly," he said. "The last time this happened, gold took off on the upside. It didn't top out."

Gartman said the continued catalyst for a bullish gold market lies in the monetary policy of central banks outside the United States.

"We've already had the Bank of Japan being told by the next prime minister to advance the supply of Japanese yen in an unlimited fashion," he said. "I don't think we've ever heard make anybody make that statement before. That's clearly going to happen."

China, too, Gartman added, was looking to expand its reserves.

"Here in the United States, whether we like it or not, whether we talked about it way too much, the going over the cliff is causing people to be disconcerted, and disconcertion leads people to buy gold," he said.

Trader disclosure: On Dec. 3, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long COST; Steve Grasso is long F; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN; Tim Seymour is long on BAC; Tim Seymour is long on INTC; Tim Seymour is long on SBUX; Pete Najarian long on AAPL; Pete Najarian long on BAC; Pete Najarian long on JPMorgan; Pete Najarian long on INTEL; Pete Najarian long on SBUX; Pete Najarian long on FB; Pete Najarian long on MSFT; Guy Adami long on C; Guy Adami long on PNC; Guy Adami long on GS; Guy Adami long on INTC; Guy Adami long on MSFT; Guy Adami OWN AGU; Guy Adami OWN NUE; Guy Adami OWN BTU.