From today's Gartman Letter...... (11-27)

"COMMODITY PRICES ARE UNDER MATERIAL, EVEN MASSIVE, DURESS EVERYWHERE and no one should be surprised given the severity of the dollar’s advance this morning. It matters not which commodities one is concerned with… base metals… grains… the “soft” commodities… precious metals… all are weak and all are weakening as the “carry trade” that helped sponsor the rise in these commodities is now being unwound with a vengeance. Copper is the most vulnerable given the huge inventories of copper that have been building up, and after that we may see weakness in the other commodities as they are lined up and “shot” one by one.

Of the precious metals, the “industrial, white” metals are the most vulnerable, for platinum, palladium and silver need industrial demand along with demand for “safe haven” speculative status to continue to rise and the former argument is now somewhat more specious and far more difficult to believe than it was only two days ago. We can imagine silver, platinum and palladium coming under very real pressure for the next several days as speculative positions that have been built up over the past few weeks are unwound in a very few days.

Gold then moves to the fore and it is holding reasonably well … indeed very, very well… in terms of Sterling, or EURs, or Swiss francs or non-US dollars... but it has fallen quite sharply from its highs in US dollar terms as it becomes a source of capital that can be drawn upon to defend equity positions that are truly under duress this morning everywhere around the world.

Having traded to $1190 at one time yesterday, spot gold is trading $1152 as we write, down $38/oz from the levels prevailing Wednesday before the Dubai situation came to the fore. However, look at what silver has done, falling from $1860/oz to $17.85. Gold has fallen 3.1%, while silver has fallen 4.1%. Or compare gold’s modest weakness to that of platinum. Platinum was trading $1462/oz Wednesday and it is trading $1425 this morning, or 1.6% lower. Or compare gold’s decline to copper’s 3.6% decline. Or perhaps most clearly, compared gold’s decline to crude’s 4.5% collapse.

The commodities markets have now become a trade completely divorced from the bullish or bearish fundamentals that we would like the markets to focus upon and have instead become the domain of the margin clerks, of panic liquidation, of uncertainty and of confusion. As we have always said, and as we shall always say in the future, confusion breeds contempt. It is doing so massively this morning [Ed. Note: As we have done with the currency markets, we are “marking” prices here today comparing this morning’s prices with those of Wednesday before the Thanksgiving holiday in the US and before the situation in Dubai came to the fore. The enormity of the price changes are all the more visible therefore.]"