HAI: So it's not so much a dollar play as it is an anti-euro play.
Gartman: Itis gold, in euro terms, predicated upon problems in Europe. So in some instances, some days you see gold is unchanged and the euro starts to go down. That's what happened yesterday. Long-gold in euro terms yesterday was really a short euro trade.
Today, long-gold in euro terms is, you're going to be losing a tenth of a percent as we speak, right now, on the trade. But if you were long gold in dollar terms, you'd be down a full percent.
HAI: So this speaks to sort of gold reiterating its historical role as money. Do you see this spilling over into other precious metals at all? Silver's basically been dead in the water since the consolidation. Do you think that that bull market is over in silver?
Gartman: I let people who are wiser, or younger, or stupider than I am trade silver. The random noise, the volatility, the scattershot trading that occurs in silver—it’s not a place that I find myself even modestly comfortable. So I hide to the sidelines and let somebody else trade it.
HAI: That's fair enough. But you have recently come out talking about being bullish on oil. Presumably that's something you're a little more willing to wade into.
Gartman: Yes, I think that the oil market has changed. Not today. I mean, they're just killing oil today. But I think what the Saudis have done was a brilliant move on their part, just a truly brilliant move. They said that they've split with OPEC—that the other OPEC members, basically the non-Gulf members, didn't wish to increase production. They said that they did and they would.
Interestingly enough, they've increased production in something that nobody wants. They're increasing production at a very heavy, high sulfur crude, which nobody really wants. And so, the Saudis, I think, have pulled the wool over a lot of people's eyes, especially the American public. It looks like they have done the right thing. It looks like they stood by us when in essence they really haven't. Nobody wants to buy Saudi heavy. No refiner anywhere will step up to buy it.
HAI: Do you think the rumors of OPEC's imminent demise have been overstated? A lot of the reporting about OPEC recently, even here on our own site, pointed out that the recent OPEC meeting was essentially saying this wasn't a decision by OPEC, it was a failure of OPEC to do its job and come to any consensus.
Gartman: It's very hard for Shia and Sunni Muslims to come to any agreement on anything. And what you saw here was a rift between Iran and Saudi Arabia. And the Saudis, I think, in back channels, have said, "We've got a problem here. We need to make sure that we placate the United States and appear to be friendly with the United States. At the same time, we would prefer keeping oil prices reasonably firm. How do we accomplish that? Well, let us make a statement that we're here to increase production, and let's increase production in something that nobody wants."
They get the best of both worlds.
HAI: So OPEC isn’t in collapse?
Gartman: T. Boone Pickens was on CNBC saying what he thinks he saw at this meeting was the beginning of the end of OPEC. I heard the same story about the beginning of the end of OPEC in 1980. We heard it in '85. We heard it in '90. It's 2011. OPEC's still here.