With gold prices recovering on Monday after dropping more than 2% last week, we turned to esteemed commodities investor Dennis Gartman for insights.
And he tells us, reduce positions - keep some power dry. Sell gold into any rally.
“I had been long of gold (in yen terms),” he tells us, but now, long is wrong.
“In the stock market a 1% move is random noise, but when something moves against you 1% in the foreign exchange market, it's material. Pay attention. When something moves against you 1%, as gold has moved against me, I go to the sidelines.”
At the time of writing Gartman was looking to cut his gold position in half.
Meanwhile, in the oil market, Gartman reiterated what he first told Fast Money last week. That is, he thinks the path of least resistance is lower for crude oil.
“There’s a lot of crude around – the term structure of futures market tells you that – WTI is in contango .”
“When deferred futures are higher than the nearby, when the nearby are above spot – it’s telling you crude is ample in supply.”
Last week, while we were talking to Dennis Gartmanabout oil he told us, ““I think you have to be very careful trading crude. If it wasn’t for the philosophical problems of the Middle East – crude would be trading $80.”
And, while we had Gartman's attention, we also asked Gartman about nat gas.
“I have a theory that the commodities markets often try to get to the obscene number – the number no one thought possible. In nat gas, I think we get to a 1-handle."