From today's Gartman Letter....... (9-25)

"COMMODITY PRICES HAVE FALLEN QUITE SHARPLY, led by base metals and energy, or more properly, by copper and crude. For the week, the DJ/UBS Commodity Index is down 3.0% and the Reuters/Jefferies Index is down 3.4%, reflecting the latter’s greater reliance upon energy and base metals. The point here, however, is that the ‘talk” on Wall Street is and has been of commodity price inflation when instead for this week the reality is of commodity price deflation. This we find interesting.

Turning then to gold, those who laughed at us for buying gold priced in Sterling and/or in EUR terms are laughing no more, for they’ve learned the very harsh lesson of the past twenty four hours that far too much of the price movement in gold had been predicate solely upon a weaker US dollar. This was the reason for our decision to own gold in terms of currencies other than the US dollar, for in so doing we’d hedged that dollar exposure away. Thus, while gold is down 1.4% in US dollar terms in the past twenty four hours, it is very nearly perfectly unchanged in Sterling terms as it trades £621.75 this morning, down from £621.90 yesterday morning. Indeed, it is interesting that for the week, spot gold in US$ terms is down from $1000.1 last Friday morning when we marked it here to $995, for a minor loss, but a loss onetheless; however, in Sterling terms, spot gold last Friday was £618.90, so it is actually higher on the week!

Our point here is that great bull markets in gold are not dollar oriented, but are broadly based, and are bull markets in terms of most, if not all, currencies. Those who avoided owning gold in Sterling or EUR terms have exposed themselves parochially to the dollar when what they really wanted was to expose themselves to gold in catholic terms. There is a lesson here to be learned."