Gold is down for the third straight session on dollar strength according to Bloomberg. UBS, meanwhile, is advising clients that gold will likely trade at $800 an ounce in one and three months from now, and that now is the time to take profits.
Financial commentator Dennis Gartman of the Gartman Letter, however, alludes to another reason why adding to gold long positions is perhaps not the best idea at the moment (our emphasis):
As for gold, of which we remain modestly long, there is a strong seller evident at the $885-$890 level, and until that seller has been sated we shall not add to our long position. We’ve no idea who that seller is, but for now we’ll suggest that it is a long standing “order” from one or several of the “legacy” central banks in Europe who’ve been quiet, but steady, sellers of gold under the Washington Agreement who still have a huge sum of gold to sell under that Agreement.
But before the gold conspirators get too excited, Gartman also writes:
We do not consider this to be “conspiratorial” selling, but merely is a continuation of a long standing policy on their part to reduce their holdings of gold. GATA may argue otherwise, however.
Related links:
Not to worry about gold backwardation - FT Alphaville
Gold declines as strengthening dollar erodes investment demand - Bloomberg
