Gartman Flip Flops With Gold Support at 200 DMA at $1618/oz, And Massive Chinese Demand

Tyler Durden's picture

From GoldCore

Gold Support at 200 DMA at $1618/oz, Massive Chinese Demand and Gartman Flip Flops

Gold is trading at USD 1,665.10, EUR 1,261.20, GBP 1,067.30, CHF 1,557.40, JPY 129,550 and AUD 1,643.0 per ounce.

Gold’s London AM fix this morning was USD 1,665.00, GBP 1,068.75, and EUR 1,262.22 per ounce.

Yesterday's AM fix was USD 1,680.00, GBP 1,077.06, and EUR 1,266.49 per ounce.

Gold in USD – 1 Yr (100, 144, 200 DMA – yellow line at $1,618/oz)

Gold fell 2.6% in US dollar terms yesterday on low volumes as technical selling led to price falls which were exacerbated by a number of stop levels getting hit. The falls may be due to banks raising capital due to liquidity and solvency issues.

Gold’s weakness yesterday was primarily a function of dollar strength. This meant that gold’s falls in euros, pounds and other currencies was much smaller (between 1% and 2% in most currencies) and gold fell less in euros than did the DAX and CAC equity indices.

The technical situation has deteriorated. The 144 day moving average which has provided good support for 2 years was breached yesterday and the 200 day moving average at $1,618/oz now becomes support.

Absolutely nothing has changed with regard to the fundamentals driving the gold market. Investment demand for physical bullion remains robust internationally.

Real macroeconomic, systemic and monetary risk remains and will support gold.

There are signs that demand in India and China is picking up again after the latest correction. Bullion dealers in India report bargain hunters again buying on the dip.

Chinese citizens continue to buy gold in record volumes with October the fourth successive record month for imports via Hong Kong (see table above).

The October total was 85.7 tonnes –up very significantly on the September figure which was itself a new record. The October demand was a massive 40 times higher than imports via this route a year ago. 

It is the fourth successive month of record imports into China and overall imports through Hong Kong for the first 10 months of the year are around three times higher than a year ago.

Of importance is the fact that the amount of gold imported through Hong Kong amounted to over a quarter of estimated global demand for the yellow metal – as noted by Mineweb.

Premiums in Hong Kong and Singapore (see chart above) are likely to stabilise near the $1.00 per ounce level as Chinese buyers are likely to again buy on weakness – especially as dealers and jewelers will soon be buying stock prior to Chinese New Year at the end of January.

Cross Currency Table


(Bloomberg) -- Gold Will Average $2,050 an Ounce in 2012, SEB Banking Says
Gold will average $2,050 an ounce next year, SEB Merchant Banking, a unit of Skandinaviska Enskilda Banken AB, said today in an e-mailed report. “Additional outbreaks of volatility should be expected in coming months during flights to liquidity with the European crisis still in a critical phase and the effects of Chinese monetary tightening topping out,” the bank said in the report.

(Bloomberg) -- China’s Gold Imports From Hong Kong Surge 51% on Haven Demand
China’s gold imports from Hong Kong surged 51% to a record in October as investors sought to hedge against turmoil in the financial markets and took advantage of the price gap between the two places.

Mainland China bought 86,299 kilograms (86.3 metric tons) from Hong Kong in October, up from 56,977 kilograms in September, according to the Census and Statistics Department of the Hong Kong government. China doesn’t publish gold trade data. The country imported more than 300 tons for all of 2010, People’s Bank of China Vice Governor Yi Gang said in February.

China’s bullion demand may be more than 750 tons this year, as the country overtook India in the third quarter as the world’s largest gold jewelry market, according to the World Gold Council. The amount includes more than 250 tons of investment demand and 500 tons of jewelry demand, said Albert Cheng, managing director for the far east region at the Council, said on Nov. 17.

“As economies in the West falter, China’s growth will moderate and many people just want to put their money somewhere safe,” said Duan Shihua, Shanghai-based head of corporate services at Haitong Futures Co., China’s largest brokerage by registered capital. The arbitrage between Shanghai and Hong Kong also aided demand, he said.

Prices in Hong Kong mostly traded at a discount to those in China in October, making imports profitable for traders who seek to exploit price gaps. Gold for immediate delivery of 99.99 percent purity on the Shanghai Gold Exchange traded at 339.40 yuan a gram ($1,661 an ounce), compared with 416.60 Hong Kong dollars (340.72 yuan) on the Chinese Gold & Silver Exchange Society.

(Bloomberg) -- UBS’s Physical Gold Flows to India Yesterday Most Since Oct. 20
UBS AG’s physical gold flows to India yesterday were “well above” average and the most since Oct. 20, Edel Tully, an analyst at the bank, wrote today in an e-mailed report.

(Bloomberg) -- Gold Is in the Start of a Bear Market, Economist Gartman Says
Gold is in the “beginnings of a real bear market,” economist Dennis Gartman said today in his daily Gartman Letter. The metal may extend declines to $1,475 an ounce, he said. It traded at $1,663.80 an ounce by 8:24 a.m. in London.

(GoldCore Editors note) – Gartman has been extremely inconsistent regarding gold in recent years. He has swung from being bullish on gold in all currencies to being bearish on gold in all currencies on a number of occasions. This is the second time that he has said that gold’s bubble had popped and we are now in a bear market.

Gartman is a trader and is followed by hedge funds and prop desks of banks and does not appear to understand the proven diversification benefits gold brings to a portfolio.

In November 2009, Gartman said that there “is a gold bubble.” Gartman said that to say otherwise was “naïve”. Gold was trading at $1,100/oz at the time.

In August 2011, Gartman said that gold was the biggest bubble of our lifetime.

Inconsistently, only last week, Gartman said on CNBC that he is “long gold” and has been for “six or seven months”.

Gartman’s short term calls on gold and silver have been wrong more often than not in recent years. He tends to turn bearish after gold has already experienced a correction and is close to bottoming.

Those wishing to diversify and add gold to their portfolio will use his call as a contrarian signal that we may be getting close to a low in this most recent sell off.

Our advice is to ignore gurus, price predictions and noise – up and down – and focus on the real fundamentals driving the gold market.

Having an allocation to and owning physical gold will again protect and preserve wealth in 2012.


(Reuters) -- Gold steady after sell-off; Europe woes in focus

(Reuters India) -- Gold price drop prompts buying, but caution prevails

(Financial Times) -- Chinese gold imports from HK hit record


(Casey Research) -- Gold and Silver Pullbacks in Perspective

(Forbes) -- Central Bank Appetite And The Monetary Case For $10,000 Gold

(The Telegraph) -- From Mr Copper to Choc Finger: Famous Commodity Squeezes

(You Tube) -- Pan For Gold On The Streets Of New York City

(Armstrong Economics) -- Why MF Global is Worse Than Europe

(New York Times) – Krugman: Debasing The Dollar, Not

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Momauguin Joe's picture

If it isn't physical, it isn't gold.

ratso's picture

Gartman - who cares what he says.

Pladizow's picture


Peter Schiff was interviewed with him this last time on CNBS and called him out - Gartman was OWNED and was noticeably irritated!


FEDbuster's picture

No one is rehypothicating my gold and silver eagles.  Molon labe.

mrgneiss's picture

Gartman continues to be one of the best contrarian indicators on gold, one of the few indicators that is actually better than the proverbial coin toss.......don't ever change DG!

bania's picture

seconded! trade anti-gartman in gold and you will quadruple your money!

oddjob's picture

Gartman is the worst of the worst. The most vile deceitful shill on the street.

High Plains Drifter's picture

and some lemmings pay this guy for advice?  

oddjob's picture

Even better was his call that copper would never go over $4 in his lifetime.

WhiteNight123129's picture

Here is the ridiculous Gartman letter from June 2009, advocating that it does not matter to be bearish or bullish you ahve to be right when he defended is "stay on the sidelines of Gold" when Gold was trading at 960. His rationale to advocate why the Dollar is S.A.F.E.: because like Rome and like the British it is natural that the reserve currency is the one from the strongest military, and since Rome had the empire and Britain had the empire and now it is US turn essentially that is what he says. being not American, I nonetheless like very much the Old School America like Ron Paul, but this Gartman guy has a delusional nationalistic in his faith in of the USD. He mentioned paranoid stuff like enemies of America attacking the dollar, while the biggest threat to the Dollar is American policy makers. The funny part is the ridicule of the argument.  First the very fact that Rome was an Empire and Britain was the dominant Empire proves only one point is that empires are transitonary in nature. Second the very argument that the strongest military creates the rationale for being the Empire currency and hence a safe currency is completly upside down, in fact overextended empires result in the demise of the currency of those empires as the cost of the wars ALWAYS CREATE DEBASEMENT, FOR CHRIST SAKE ARE PEOPLE SO FUCKTARDS NOT TO REALIZE THAT, JUST OPEN A HISTORY BOOK GARTMAN. We have a carry trade short squeeze, hold on to your seats Gold Bugs, nothing has changed on the overindebtness of the US.




He_Who Carried The Sun's picture

Shouldn't you know first what he actually said?

“We have the beginnings of a real bear market, and the death of a bull,” Mr. Gartman wrote. “Since the early autumn here in the northern hemisphere gold has failed to make a new high. Each high has been progressively lower than the previous high, and now we’ve confirmation that the new interim low is lower than the previous low.”

Even more disconcerting is the fact that China has been an aggressive buyer of gold in recent weeks. The total amount of gold entering mainland China from Hong Kong reached 286.8 tonnes in the first 10 months of 2011, which is more than triple the amount just a year earlier.

While buying of that sort should have sent gold prices soaring, instead they plunged.

One of the oldest rules of trading is simply this: a market that cannot or does not respond to bullish news is a bearish market not a bullish one,” Mr. Gartman said. “This was manifestly bullish news and it was received very bearishly indeed.”

Given how much psychological damage has been done to the gold market in the past week, and with so many long positions being caught off guard, he thinks wholesale liquidation and perhaps forced selling will be the outcome.

“It really won’t take much to push it there,” Mr. Gartman added.

Source: Financial Post.

Sean7k's picture

Perhaps he didn't read about the central bank and BIS intervention in the market. This is the real source of his "bear market". Gartman is a tool.

WhiteNight123129's picture

How can the treasuries and Gold be both in a bubble at the same time, which one of the two looks the most dubious of the two?

johnu78's picture

Preach it brother!

I'm going to take a nap, wake me up when gold hits $5,000 an ounce. :)



Widowmaker's picture

There is waaay too much emotion in the gold trade right now.

Sell, you can thank me later.

Otherwise, see ya at 1200-1050 oz. ( or lower!)

Smiddywesson's picture

The game for central banking is to kick the can and buy gold, while keeping gold within a trending range which has stayed at +20-25% for ten years.  
So TPTB are not going to crush gold or let it ramp to the sky until this game is over, and it ain't over yet.  They have plenty of margin hikes and fiat left to hold it down, and they have the experieince of driving it to $1534 and almost decoupling it from paper to remind them what happens if they get heavy handed.

Contrast that manipulation mechanism where MARKET forces drive gold prices lower without decoupling paper from physical as everyone sells everything and runs to the USD.  In a general sell off, gold has no bottom, it can continue to fall without any adverse repercussions to the paper gold market at all as long as paper gold is not swimming against the tide.  In a manufactured sell off like in Sept., there are limits the TPTB can achieve before damaging the paper price suppression scam.

Failing to understand the difference between these two situations can ruin you.  

All of us must have a physical position for reasons of wealth preservation.  Nobody can perfectly time the coming collapse so you are just going to have to purchase physical at what prices you can get.  But those of us who trade in and out of the market have to understand, gold is still part of that overall market until the market dies.  Ignore market sell offs, and you will lose your money.   I think Widowmaker is right.  There is going to be much lower prices before this is all said and done and then you will get your payoff in the form of a gold reevaluation.  Until then, ignore the pain and preserve your paper for much lower prices. 

Free Markets's picture

I believe it will go lower with the market also. Hedge it with GLL or DGLD with paper

Smiddywesson's picture

It's tough to trade with this much manipulaton, emotion, and volatility.  I've retreated into a big physical position and a big cash position.  If gold continues to rise @25% a year and we don't see a sell off with the stock market, I still have that cash to buy at higher prices.  But if gold sells off with the market, I can scale in with the rest of my cash.  Win-win.  I'm not fighting the central bankers and I'm not trying to predict the future, but the sell off prior to super high prices seems probable to me.

Free Markets's picture

My strategy is for those that are waiting for some magical entry point. Buy physical now and the hedge till you find the right price to drop the hedge.

Widowmaker's picture

My favorite visual aid is stamped on every eagle - $50.

Widowmaker's picture


Trading gold and owning it in perpetuity are as different as owning and renting a house. It's a means to an end, but different reasons and risks.

Like a home, when emotions are involved, the most emotional pays the premium - ALWAYS.

Young gold bugs beware. Settle on an eagle for each child you have, with the year they were born (or something)

Giving that "investment" to them at the right time is worth more than any premium paid (or lost) based on fear or greed.

High Plains Drifter's picture

it is a terrible place we are leaving the children. 

Widowmaker's picture

Children, democracy, business, rule of law, privacy, etc...

"The business may be dirty but the money is always clean."

Sean7k's picture

The problem is: when will the paper and physical price decouple? When will we be unable to purchase physical at any price? 

I agree there are many games to be played. Any study of economies that suffer irreparable damage show longer timelines and resiliiancy than one might expect. People want the system to survive and will do all they can to encourage the can being kicked down the road.

China and India have much better understandings of the value of gold and silver then we do- and they are buying like crazy as their economies face hard landings. 

Further, with a limited experience with gold and silver, will Americans even understand its' useage? Will they be able to see its' value? We continue to hear statements of "you can't eat it", "it isn't backed by anything" or "how do you buy a loaf of bread". 

We could end up with a huge population of people holding wheelbarrows of dollars wondering why there isn't a better substitute. Then, what do you use for new capital formation? It would not surprise me to find the banks holding the gold and creating a new wealth system based upon it. 

The banks could just screw up things so badly, the people are too lost to figure out a way through. They could "win again". 

The beauty of an ignorant public is they have no idea of what is possible.

Badabing's picture

"We continue to hear statements of "you can't eat it", "it isn't backed by anything" or "how do you buy a loaf of bread". 



I get this shit all the time from family and friends and have some answers to these planted statements by the gold bashers in the MSM.


“You can’t eat it”

Reply:  Yes I know, and all other money is valued on it’s edibility?


“It isn’t backed by anything”

Reply: Gold is backed by gold, I guess that’s a little hard to understand.


“How do you buy a loaf of bread”

Reply: How do you buy a loaf of bread now?


“why would you buy gold when its at an all time high?”

Reply: That’s what you said the last time I bought gold.


“Do you think it’s the end of the world?”

Reply: No, just the end of the fiat ponzi.


Smiddywesson's picture

Give up on family and friends.  It's a trap.  If they make money from your advice, they will forget it was your advice and think they are a genius.  Worse, if they lose money, they will cash out at a low and blame you, then absolutely hate you when prices climb after they dump their gold.  

If they have taken this much to convince, they don't have the intestional fortitude to survive the kind of volatility that is coming.  You can't save them.  I'm very sorry, I have tried and learned my lesson.

DoChenRollingBearing's picture

+ 1 as usual Smiddy

Until a year or so ago I always tried to tell friends and family about buying gold as a wealth preserver through lousy economic times.  A few listened politely, but only TWO actually went and bought some.

So I gave up trying.  They all know my position anyway.   I learned my lesson as well.

Great observation on how they might mis-time gold purchases and sales.  Yes, they might sell to low and miss the huge spikes to come.  And hate you for it.

Maybe you have to be BORN to be a fan of gold?  The ones I helped convince were already dubious of our financial system and cynical of .gov and the banks...

Smiddywesson's picture

Maybe you have to be BORN to be a fan of gold?


Some view history as a story that is written and over with.  Others view it as one long story that is retold again and again.  Even if they don't say the words, the former live their lives under the belief "It can't happen to me."  Since no amount of convincing can get them past this belief, yes I believe they were born that way and gold bugs were born different.

Caveat:  People who are subject to starvation are sometimes so traumatized that they horde food for the rest of their lives (Ex.  The survivors of the Essex.)  Given enough trauma, people can understand their own mortality, to include their financial mortality.

data_monkey's picture

This is how I feel about my co-workers. Sad.

Gohn Galt's picture

I hope your right, but with his track record, Gold will continue to spike.  That son of a bitch.

What was someone in here saying.  There are two type of hedgefunds, those who make money just top loose it to primary brokers and those who understand the game and loose their clients profits in unnamed overseas trusts.  It's hard to understand how these Primary Brokers can be trusted to hold on to a lump of coal.

Smiddywesson's picture

That's a good level if the can is still being kicked.  However in a big sell off, picking bottoms can be dangerous.  If gold prices slide during a big sell off, scale in.  You are unlikely to be able to buy when the bottom happens, it will be during the Asian session.  More importantly, any drop in PM prices towards end game will be a slide off in prices, followed by a spike down and then a ramp from the bottom.  Even before end game, it will become increasingly difficult to buy on the ramp, both because vendors won't sell it to you, dragging their feet and experiencing technical difficulties with their web sites, and because of the time compression of the ramp.  At the very end, when PMs hit the bottom, there won't be any gold available at all.  So you HAVE to buy on the way down and not call the bottom.

DoChenRollingBearing's picture

My strategy of buying physical is similar, although I really do not let the price influence my buying decision.  I BUY when I have extra FRNs.  As income arrives, part goes to gold.

OK, if there has been a big spike down, I *may find* a little extra income to buy...

Please note that I have bought some 85% of my gold at or near *record highs* through the decades, and it has worked out very well.

WhiteNight123129's picture

How about the emotion in the Treasury, invisible lethal bubble. Check Gross on US worse than Greece. Check out Buffet on treasury in the bubble of the ages. Not enough emotion in the Treasury trade my friend. Asleep at the wheel is what you are. I will surrender when the political consensu of putting everything on the credit card and not worrying because 10 years treasury are at 2%. Who is in that camp? Only your Ron Paul guy is not sleeping at the wheel. Once you sell your Gold you do what with buy 30 years treasuries at 3%????





speconomist's picture

Gartman said in August that the greatest bubble of all history had exploded (gold). Peter Schiff called him out recently on that topic, with gold around $1750 (IIRC), and Gartman negated what he had said.

fonzanoon's picture

damn right speconomist. I wish ZH or someone on here could put a youtube together of that fat fuck making that call in august and then Schiff calling him out and watching him deny it. Everyone on this site should get that video to go viral.

LookingWithAmazement's picture

Gold and silver are massively overvalued. If all the "paper gold and -silver" would be removed from the markets, prices would plunge. The market is strongly manipulated/frauded upwards. So better not buy PMs until then.

HellFish's picture

Either you forgot the /sarc tag or I think you've got that backwards.

eddiebe's picture

Looking, gold and silver are vastly over valued compared to what? And as for your other statement about the PM's paper market, you are completely wrong. How do you come to your conclusion.Are you being sarcastic? If paper (ie.fractional derivatives) were to be removed from the, the price would be vastly higher.


LookingWithAmazement's picture

Overvalued compared to the situation without all the paper crap. And if prices without would be much higher, why aren't prices rising sharply now? Present prices would be a bargain if you're right.

DoChenRollingBearing's picture

+ 1  

Correct, physical prices are a bargain now.

And LookingWith Amazement will be left behind when gold revalues.  Hey, it was his choice.

To be fair, no one can predict the future.  But, the $123,000 each taxpayers owes (on our $15 tn Federal Debt only) leads me to the obvious conclusion that gold will go up in US$ at its appointed hour.

LoneCapitalist's picture

Paper gold and silver are part of the supply. If you reduce the supply , prices go up.

Kina's picture

Obviously acting deliberately dumb.

Of course it is the selling of paper gold and silver way beyond physical holdings that is supressing prices and deliberately so, I don't think anyboyd disputes that any more.


So the US prints money so the fiat value of gold is meant to go down not up? The more dollars you print the greater their purchasing power. LoL