From today's Gartman Letter...... (10-8)

"COMMODITY PRICES HAVE FALLEN VERY SLIGHTLY in the past twenty four hours, although the attention is upon gold, which is making new and higher highs as we write… and upon the other precious metals which are stronger even still. We shall begin our comments noting here that we have never… in the 25+ years of writing TGL each day… given more interviews regarding any other facet of the capital markets than we’ve given in the past 48 hours regarding gold. Never, not ever! Historically, that sort of thing marks interim highs, and although this time may be different, we suspect it is not. We shall counsel our clients not to begin new purchases of gold, in any fashion, at these levels. One may not wish to exit current positions, but one cannot… or at least should not... enter new ones.

The debate in the gold market is whether the public is too heavily involved… or in some instances, involved at all. We have heard from friends in the business that the public is not nearly as involved in gold as it was back in the 80’s in the last great run up. Perhaps that is true, and we shall admit that we find it interesting that there are at least as many advertisements on television for gold selling opportunities as there are for those wishing to buy gold. We did not see that sort of thing back in the 80’s gold bull market. But gold is now the topic de jure almost everywhere, and while having dinner last evening at our club, the first question we were asked was “How much farther can gold go up?” We were asked this by an individual that had never, ever asked our opinion on anything financial before, and the question was clearly asked from a bullish… and hopeful… perspective.

We remain long of gold in Sterling, EUR and now US dollar terms, and having added to the position in dollar terms earlier this week, we’ll sit tight. We’d not argue, however, with those who might wish to write calls against their gold, for the premiums being offered are shockingly high. Indeed, we note that calls on gold $10 or $20 away from the current spot rate are demonstrably more expensive than are puts $10 or $20 below the current spot. This is evidence of the public’s willingness to bet bullishly of gold, and it is evidence, we thin, of an excessive speculative enthusiasm. Should gold make its way back down toward $1000-$1020, we’d be willing buyers once again; but at $1050, “Not so much:”