Gartman on Gold: We’ve Never Ever Seen Anything Like It

Gold prices continued to plummet Monday on concern that Cyprus will have to sell excess reserves of the precious metal to raise about $522 million to help finance that country's $13 billion international bailout, Dennis Gartman, editor of The Gartman Letter, told CNBC.

"There are a lot of people throwing up their hands. Throwing positions overboard. Panic is everywhere," Gartman said in a "Squawk Box" interview on Monday. "I've never seen anything like this. I mean it."

Gold prices broke below $1,400 Monday, their lowest level since March 2011. "Here we are under [$1,400]," Gartman observed. "Who would have thought it? Not I."

"I think it would be unfair to force the Cypriots to sell [gold] and not to have others do exactly the same thing," he argued. "I expect Spain and Portugal, Italy will also be rumored to do it, and that's weighing on prices."

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Gold mining shares around the world were battered, with shares of Australian-listed Kingsgate Consolidated, a gold producer and exploration company, and miner Beadell Resources plunging 15 percent, while Newcrest Mining, which operates gold and copper mines, tumbled more than 8 percent.

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Gold producers in China and the U.K. also fell sharply. Shanghai-listed Zhongjin Gold fell 6.5 percent, while Zhaojin Mining tumbled more than 9 percent in Hong Kong. In the U.K., Randgold Resources fell 7.2 percent, while Lonmin and Kazakmys were both down over 6 percent.

Analysts at Citigroup also sounded a bearish tone on Monday, pointing out in a note that the firm now had a "sell" rating on all U.K. silver and gold miners, except one.

"As you get closer to the cash cost production for gold, which is around $1,200 an ounce, people get nervous," Jonathan Barratt, founder of Barratt's Bulletin told CNBC.

But Barratt added that he believes this is a "significant overreaction" and offers a good entry point for investors. "For the amount of money that's going into the system, you have to take a longer-term view that stimulus will support gold prices," he said.

Gold miners have struggled to find favor with investors over the past year, due to their declining profitability in the face of rapidly escalating operational costs and poor performance of the precious metal.

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The precious metal has entered into bear market territory for the first time in 12 years. It is down about 25 percent from a peak hit in September 2011 at $1,920.

Reports last week that Cyprus was planning to sell some of its gold holdings have been the latest trigger for the sell-off in gold.

(Read More: Cyprus Central Bank Denies Plan to Sell Gold)

"Gold hasn't done anything for anyone for a long time," said Clay Carter, head of international equities at Perennial Investment Partners in Sydney. "If we were going to buy a gold producer it would have to be one that could really beat production."

(Check Spot Gold and U.S. Gold Futures quotes here.)