From this morning's Gartman Letter...... (10-1)

"COMMODITY PRICES ARE VERY SHARPLY HIGHER, as measured by the DJUBS and Reuters/Jefferies indices. This is all the more interesting in light of the fact that the US dollar is stronger, not weaker, for as we all know perhaps too well, a weak dollar begets higher commodity prices while a strong dollar begets weakness. Now, we are seeing the other side of that confusing coin, and we are all finding this all the more interesting as a result.

Firstly when we note that gold is rather sharply higher and our positions long of gold/short of the British pound sterling and short for the EUR are made all the more profitable as a result. Yesterday, gold in Sterling terms was trading £622/oz. This morning, with Sterling weaker and gold stronger, it is trading £631.50… new highs for the recent bullish move. Further, yesterday, gold was trading €681.95 and this morning it is trading €691.35/oz. This is impressive strength and it serves only to increase... or at least to hold steady… our urge to own gold, not in US dollar terms, but in terms of other currencies, having hedged out the US dollar exposure as a result

Gold is firm too, despite the rather bearish news from India, where today the Bombay Bullion Association reported that India's gold imports in September fell 77% from that of a year ago to 35-40 tonnes… AND they might even fall to zero in the fourth quarter because of the current high prices. This is according to the comments from the Association’s President, Suresh Hundia.

India imported around 154 tonnes of gold in September 2008, but Mr. Hundia said that "If prices remain high, there will be no imports in the last three months of the year.” This is stunningly bearish news… and yet gold has taken that news rather well as imports fell to 126 tonnes in the first nine months of the year from some 354 tonnes in the first nine months of 2008,
.
The only good news was that September’s imports were slightly better than those of August, when India imported 13 tonnes of gold. Mr. Hundia said that demand increased up ahead of the Diwali festivals and ahead of the autumn wedding season. Gold, as we know, is culturally important in India and is believed to bring prosperity for families throughout the year if bought during or ahead of Diwali, which starts this year on the 17th of October."