From today's Gartman Letter...... (12-22)

"COMMODITY PRICES ARE WEAKER as the dollar has strengthened, but with the exception of precious metals, prices have not fallen materially, but rather have fallen “a bit,” or “modestly,” or as we say here in the South, “A Tad.” The trend, still, for commodity prices generally remains upward and one can see that rather clearly from the chart this page, courtesy of Bloomberg.com, of the UBS Bloomberg, the S&P GSCI, the Reuters/Jefferies and the Rogers International indices. Until these trend lines are broken one has to maintain that the trend for commodity prices is generally higher. Clearly a steadily rising US dollar should have a deleterious effect upon these trends, but for now prices are holding well despite the strengthening US dollar. This we find impressive

Regarding gold, obviously it came under swift and very real pressure yesterday with one stop after another sought out, found, and then executed one after another after another. The strong US dollar might not have had a material effect upon grains yesterday, and it may not have had a material effect upon cotton, or upon rice, or upon any of the myriad types of commodities traded around the world, but it had and is having a material effect upon precious metals prices, and most notably upon gold. As we write, gold in € terms is trading €766, down materially from yesterday’s levels. In ¥ terms it is trading ¥99,773, back below the psychologically important 100,000 level. However, in neither case has it broken important technical support, and so long as that support obtains we shall remain bullish of gold as we have for months.

This is the holiday season however and it is the impending year’s end, and with that comes illiquidity and a sense of, “Oh, what the heck; let’s get out; let’s go to the sidelines and let’s take up the cudgel again next year.” That is, one can never under-estimate the power of the urge to square up, to take one’s trading lumps, and to reduce collective exposure. These things happen around this time of the year. ‘tis best to prepare for it."