On any day of the week you will hear one of the bobbleheads (not Gartman) say 'Investors fleeing to gold as a hedge to deflation'... the next day, 'Investors fleeing to gold as a hedge to inflation'
Trade/Invest according to the Bobble-Heads and you'll get to Brokeville. With all due respect to Commodity King Gartman, I'm going to disagree.
While Gold is overbought in the short-term, overbought doesn't mean to be bearish in the long-term. I will acknowledge gold's "technical picture" had some damage done to it over the past couple of months, but that's merely on the daily charts. Hell, I may even short about $6billion worth of GLD puts (struck at market of course), expiration 12/2010. There is some guy in Omaha interested in buying them.
In fact, they've got it exactly ass-backwards.
- Gold performs the best during deflation (especially debt deflation).
- Gold does not perform too well during inflation.
- It performs the worst in disinflation.
Edit: corrected stagflation to disinflation. I've been looking at POT charts too much lately that I'm giggling and having short term memory problems.
