From today's Gartman Letter...... (12-4)

"COMMODITY PRICES HAVE FALLEN IN THE PAST TWENTY FOUR HOURS, as the dollar has strengthened and no one should be surprised really. Gold has fallen from its highs, and that should shock no one. Having traded to $1226 yesterday, gold has traded as low as $1201 in Asia this morning. Given the high level to which gold prices have risen, we must become comfortable with the fact that gold prices shall be far more volatile intra-and-inter day than we’ve been used to in the past several years. Simply put, a 2% change with gold at $1200 is a great good deal larger than is a 2% change in price at $600/ounce. It is that simple. Corrections intra-day can easily be $25- $30/ounce, and mean absolutely nothing except to take late, under-capitalised traders out of their positions and forcing them to the sidelines where they become buying power again.

If we must point to one bit of news that rationalizes the weakness overnight in gold we shall point to the comments by Ms. Wu yesterday of the People’s Bank of China regarding gold and the comments above by Mr. Wang regarding China’s reserve policies. Ms. Wu, as everyone should remember, said that gold is a “Bubble,” making it clear that China was not intent upon taking up a large sum of gold at this time for its reserves. Then Mr. Wang said that China has no intention of making material changes to its reserve positions, adding fuel to the non-gold-buying-by-China thesis.

Thus far, gold has found support at $1200, but we’d not be surprised to see it trade down through that level by a dollar or two or three late today. At that point we’ll be a buyer for those who’ve remained out of the market thus far. It is a bull market, and in bull markets one buys weakness when weakness avails itself."