The price of gold briefly traded under $1,700

The gold price declined Tuesday Morning, sliding $48.85 to $1,712 per ounce. The price of gold briefly traded under $1,700. Weakness in global stock prices pressured the yellow metal as well as the entire commodities complex. Ongoing sovereign concerns over Europe’s debt crisis combined with news this morning that the “super committee” in the U.S. has failed to reach an agreement to cut $1.2 trillion in spending. Oil and copper fell 1.5% and 2.2% to 96.32 per barrel and 3.34 per pound, respectively, while S&P 500 stock futures retreated 15.50 to 1198.40.

Commenting on the move lower in financial markets, long-time commodities investor Dennis Gartman wrote in The Gartman Letter on Friday that ”No prisoners were taken and no place offered solace. The grains plunged; energy plunged; equities obviously plunged; the base metals plunged… and all of these were understandable amidst the chaos of the moment, but gold plunged perhaps the worst of all, falling precipitously and falling relentlessly. Nothing proved to be safe, save perhaps US and German debt securities, and nothing is proving to be safe again this morning as fears arise that the margin clerks are again moving to the fore, pencils sharpened and liquidation orders in hand.”

Gartman later discussed the gold price specifically, saying that “This then brings us to gold and gold plunged…violently… relentlessly and without respite. As stocks fell, gold fell, for the market is concerned that there shall be more selling from the likes of Mr. Paulson and other hedge fund managers who had hoped that they were on the mend but whose hopes were dashed Wednesday afternoon as stocks swooned late in the day, setting up yesterday’s further weakness.”

While Gartman acknowledged that the gold price could head further south in the short-term, he reiterated his longer-term positive outlook. “Underpinning our long standing bullishness of gold was the expectation that eventually the Germans will have to ‘give’ on their position against central bank monetization of sovereign debt and that when they do so gold would soar. That may still happen. It may happen this weekend, or next month or next year, but it will happen. There is nothing else that the Europeans can do to bring themselves out of the recession into which they are falling. But for now, Berlin is intransigent and the margin clerks loom.”

“Is the bull market still intact for gold?” Gartman posited. ”Yes, of course it is, but the short term is wrought with danger and we’ve no choice but to use rallies today and perhaps Monday to lighten up our positions a bit.”

Although the economic calendar is relatively light this week due to the Thanksgiving holiday in the U.S., there are a few key data points likely to serve as catalysts for the gold price. Existing home sales for October will be released on Monday, followed by second quarter GDP and the latest Fed minutes on Tuesday. Wednesday follows with weekly jobless claims, durable goods, and University of Michigan Consumer Sentiment.