Dennis Gartman 'Watershed' Shift on Gold

Investor psychology had become so overwhelmingly one-sided in gold, Dennis Gartman of The Gartman Letter says.




the gartman letter. when we spoke last week you were overly negative on gold. what happened since then that causes you to make what you are saying is a water shed moment to go the other way? what did you see? as markets change it's always a technical circumstance, rarely is it fundamental change that gives you a shift in sentiment. you had ab jekt panic, throwing overboard of positions. you had the commercials on the future's market having their smallest net short position almost to the point of being net long that we've seen in many, many years. you had market vains bullish number lower than we've seen in several years and gold down 27%. when you read the newspapers all you got were bearish implications for gold. that's the sense that gives you a turn around and i think you've had it. you're talking about technicals and saying the fundamentals had to have changed. we sat on the desk last monday and you said gold is going dem on stra blee lower. you said there's no more easy monetary policy and you said other commodities are falling and they're falling on the back of zero global demand. i'm curious what the call is. tim, you did go lower from last monday until thursday you went 85, 95 lower. what has changed fundamentally? probably nothing. but you did have a technical circumstance that changed. i'll pay attention. i've been at this a long time. i want to see the technical sirkz that changed. that's the first things that happens. the fundamentals will follow later. and perhaps i'm wrong, i have been wrong before, i could be wrong again. i think what happened on monday -- so i agree with you. the psychology last monday night and that's why i think it's important we tell people that monday night people thought the world was coming to an end, the fed was running out the door. that was an overreaction. and that didn't happen. i think it's important that with gold and things that are so fed driven and sentiment has been so moved by the fed that are we saying that the fed is now out of the picture? i'm curious if that's implied in what you're doing. the fed is going to be out. the fed has told us they're going to be out of the picture but the fed is not going to be out of the picture in september. the fed is not going to be out until the end of the 2015. the monetary bases is increasing. it's bortherred me how severe has been the increase in the monetary base over the course of the last six months. the fed is still there. i don't think this is going to be an inflationary circumstance. i think all you have is to gold is another currency. it's ancillary to the dollar. the dollar is number one. gold is probably the second most important currency in the world right now. you and i got into a discussion last monday about the aussie. it's absolutely where it was last monday. i'm bullish. you're bearish and we are dead break even. i will tell you i actually said said -- the aussie is oversold. it goes to 9350 and i sell it again. dennis, what is water shed mean in terms of dollar terms? where does gold then go between now and the end of the year and also because sentiment was so negative don't you worry at least somewhat that you're get selling into any strength that we see and that's go going -- you got up to 1260 at one time. you broke it back down. there's going to be sellers of the gold on any rally. that's normal. i use the term water shed very rarely. it's the term i use when i'm making a change in sentiment. where does it go from here? higher, probably several hundred dollars higher. the risk reward is probably to the down side $75. to the upside 3 or $400 higher. so at 1255 you wouldn't be surprised to say by the end of the year we're at 16? is that doesn't seem that far fetched? that doesn't seem far fetched to me at all. that would still be $300 lower than its high. if i'm going to be bullish of gold i'm going to be a buyer of gold and a seller of yen. if you had done that over the course of the last two and a half years you're down. if you bought gold in yen terms you're down two percent. that's a good overperformance. because we know that opinions in position can change you told