Dennis Gartman, everyone’s favorite gold analyst, said yesterday (even before the carnage) that he expects the gold price not to recover much any time soon due to what he expects will be central bank selling. He thinks the banks will sell the allotted gold under the Washington Agreement and that will keep a lid on gold prices.

He could be right. And we all know how central banks have a habit of selling at the proper time, right? Gordon Brown didn’t seem to mind that he cost the British citizenry billions by his inopportune selling of some years ago when the gold price was a fraction of what it is today.

From what we have seen in the last decade, any time a central bank offered gold for sale it was wise to get in line to buy it. Maybe it’s supposed to be a form of government hand out?

Unfortunately, if history repeats itself, Dennis Gartman won’t be bullish on gold until its “showing strength” which may not be until it blasts past the old high. I rather be an owner at $850 and watch it tap $780 than to be an owner at $950 or $1025.

You can many times make a fortune buying when there is blood in the streets. There is blood now. But be careful what you buy.

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