Gartman admits a bad call on gold, but that's not GATA's grievance

Submitted by cpowell on 08:52AM ET Thursday, January 5, 2012. Section: Daily Dispatches

11:57a ET Thursday, January 5, 2012

Dear Friend of GATA and Gold:

Canada's National Post reports today that commodity market letter writer Dennis Gartman has admitted a mistake in his gold trading advice and has concluded that gold's bull market continues after all.

While it's always encouraging to find that experts can admit mistakes, as only people who admit mistakes can be trusted, GATA's objective isn't to identify mistaken market calls in the monetary metals markets.

Yes, the logic of GATA's premise argues for steadily higher prices in the medium and longer terms. Our premise is that the monetary metals markets are highly manipulated at the direction of Western central banks, and that this manipulation is achieved through short positions taken by investment banks that can be covered only with central bank dishoarding or cash assistance, if at all. But if they succeed in keeping investors ignorant of their manipulations and interventions, central banks may keep monetary metals prices well below free-market prices indefinitely. In any case, until those manipulations and interventions stop, only those who have inside knowledge of central bank interventional plans -- insiders like the big investment houses that often function openly as central bank agents and double as monetary metals market manipulators -- could be right in the gold market as traders all the time.

No, apart from the market manipulation itself, what GATA finds objectionable are the denial of that manipulation in the face of all the documentation we have collected and published since our founding in 1999 --

In recent years Gartman occasionally has acknowledged the possibility of surreptitious intervention by central banks or their agents in the gold market, even as he has delighted in noting his disdain for gold bugs. As he has more or less conceded our main point, that disdain doesn't bother us. Besides, we're not so much gold bugs as free-market and government transparency bugs. And if free markets and government transparency are ever accomplished and investors are able to see past the hologram markets created by central banks, the whole world will turn into gold bugs and become quite able to fend for itself.

The National Post report on Gartman's admission of error is appended.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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Gartman Admits He Made a Bad Call on Gold

By John Shmuel
Financial Post / National Post
Toronto
Thursday, January 5, 2012

Mr. Gartman's reversal comes as he has failed to buy back gold below the price he sold it at a few weeks ago. He said that now that gold priced in euros has taken out its previous interim high, he sees the metal returning to a bull market.

"The bear run that began in August has now officially ended, for the string of lower lows and lower highs is over," he said in his Gartman Letter. "This does not help us in hoping for/expecting/indeed demanding some weakness into which to buy, but it does give us 'permission' to become officially bullish once again."

Whether his new position will be enough for Mr. Grandich to back down, however, is another question.

When Mr. Gartman made the bear call last month, Mr. Grandich said he was willing to wager Mr. Gartman US$1 million that gold will hit US$2,000 an ounce before it hits US$1,000 on the COMEX.

He even went as far as arranging for a law firm -- Lomurro, Davison, Eastman, and Munoz of Freehold, New Jersey -- to hold the funds in trust.

For what it's worth, Mr. Gartman admitted his call on gold was a bad one.

“We sold gold rather properly several weeks ago; we failed miserably, however, to buy it back, for although our intent was clear late last week, as we said it was our intention soon to re-buy that which we had sold, we've failed to do so," he said.