Dennis Gartman on gold and Murphy's Law
Gold suffered a second day of selling on Friday dropping $21 to a 5-week low of $1,310 an ounce.
The gold price seemed to have turned a corner in August, briefly exiting a bear market as it fought back from near 3-year lows.
But this week's 5% drop towards $1,300 is the worst performance since the end-June plunge to below $1,200.
Noted investor and closely followed newsletter writer Dennis Gartman made a call in late August that the gold price will outperform stocks.
In an interview with CNBC, Gartman explains that buying gold toward the end of August turned into a "Murphy's Law" trade where everything that could go wrong did go wrong, including a diplomatic way out for the US in Syria, Fed taper and a surging stock market:
"Throw peace on top of lesser accommodation on top of quietly reduced commodity prices generally on top of rising stock prices—all those things rolled into one great bouillabaisse says gold prices want to go lower," he said. "They have been going lower, and it's really getting quite ugly, isn't it?"
So instead of waiting for the trend to reverse, Gartman is now taking the other side.
When looking at the market today, "I actually don't like gold better than stocks," he said. "About a week and a half ago I started buying stocks again."