Dennis Gartman does not have a great track record on gold, so much so that many traders hate to be on the same side of a trade with him.

Dennis just commented the other day on gold’s tight and tighter trading range and wondering at what point it will shoot outside that range – and which direction.

Ed Steer is concerned about the 22 million ounces of gold that the bullion banks are short and thinking they will destroy the longs one more time in order to cover that short position at a profit. (Big banks are unaccustomed to taking losses in markets they control.)

Either way we will likely know soon. As Peter Grandich pointed out, gold’s soft season is all but behind us and now the stock markets traditional danger season is upon us.

So what does that mean? Anyone who knew for sure would not be working for a living.

What is the safest approach is to look for long term trends and follow them. Especially with the Chinese government encouraging gold and silver ownership among its population, it seems being long gold and silver is a much safer bet than being short.

With gold’s 200 day moving average now above $900, it would seem the downside is pretty limited. Any weakness is sure to be bought.

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