Gartman sells. Open Interest suggests why.

Indian ex-duty premiums: AM 62c, PM 82c, with world gold at $925.70 and $920.75. Somewhat too thin for legal imports. The rupee softened to $1=R43.295 (Friday: R43.15) but the stock market managed to rise 0.54%.

[Friday: India ex-duty premiums: AM ($1.00) PM 97c, with world gold at $935.75 and $932.35. Below, and barely far enough above, legal import point. The stock market rose 2.75% and the rupee firmed to $1=R43.15 from Thursday’s R42.3.]

Considerable attention is being paid today to a report from the Bombay Bullion association to the effect that India imported 24 tonnes of gold in June, compared to 74 tonnes in June ’07 – a fall of 67.6%. See

http://www.forbes.com/afxnewslimited...
/07/afx5187036.html

Actually, considering world gold was some 37% higher in June ’08 and 46% or so in rupees, it is something of a wonder India imported anything at all. The premiums reported here were only intermittently high enough.

Less widely reported is a story on Reuters from Dubai that gold volumes there were up 17% in June.

On Friday (July 4th) The Gartman Letter suddenly announced that its entire gold holding would be sold if world gold if gold dipped even momentarily below $930. This very tight stop – tantamount to a sell – was triggered early today. One again, the impression is that this well-informed observer had wind of another raid.

This would have been a reasonable inference also from Thursday’s open interest data, had they been available. The $12.90 loss on the day, constituting a modest recovery from the Comex opening $18 slump, involved a 6,959 lot increase in open interest – 21.64 tonnes. This means in 5 business days Comex gold advanced $18.50, or 2%, while open interest rose 116.3 tonnes, or 9.2%. Determined opposition.

Normally this time of the year is not especially difficult for the Bears to control, since it is India’s off season. However, the Dubai data, and the Turkish import data of last week, suggest that the Middle East is unusually active. Perhaps it is too early to go to sleep.