Dennis Gartman, a famous commodity investor, said that although the long-term upward trend of gold is still strongly supported by bullish fundamentals, the market looks a bit foam and may be subject to a correction.

Gartman expressed some concerns about how much attention gold has attracted in the past few weeks. The new investment demand has pushed the gold price above $2800 per ounce.

He said in last week's Gartman Letter, "I am still bullish on gold in the long term, but in the short term, I am a bit worried

He said in an interview, "In the past two weeks, the public has become somewhat obsessed with gold, which has troubled me a bit

The gold price has dropped significantly from its historical high on Wednesday, with the latest trading price for December gold futures at $2746.20 per ounce, a drop of nearly 2% on the day. With the US economy maintaining considerable resilience and inflation pressures remaining stable over the past three months, the selling of gold has intensified.

The core personal consumption expenditure index (PCE) released on Thursday showed that the inflation rate for the past 12 months has remained at 2.7%, unchanged from July and August. This index excludes volatile food and energy prices and is the preferred inflation indicator of the Federal Reserve (Fed).

Gartman stated that in this correction, he expects gold prices to drop another $50 in the near future as investors adjust their inflation expectations. He also said that the possibility of a stock market correction may increase the short-term risk of gold, which could trigger liquidity events.

Meanwhile, the S&P 500 index has fallen nearly 2% this week, down 2.5% from its historical high set two weeks ago.

Gartman said, "A weaker stock price generally puts some downward pressure on gold, as gold will always be a place where liquidity can be found to meet margin call requirements

However, Gartman stated that aside from the short-term fluctuations of gold, he still has a positive outlook on the long-term bull market.

Gartman said, "The main trend is still from the bottom left to the top right. Gold denominated in US dollars continues to strengthen; gold denominated in euros is even stronger, while gold denominated in Japanese yen is the strongest. I will continue to recommend people to hold gold denominated in US dollars, euros, and Japanese yen

Gartman pointed out that gold prices still have good support, as geopolitical uncertainty drives safe haven demand and central banks continue to increase their exposure to gold.

Despite the slowdown in official demand in recent months, Gartman predicts that rising inflation will force central banks around the world to continue increasing their gold reserves in the foreseeable future.

Gartman said, "I don't think inflation has disappeared; in fact, I think the situation will only continue to deteriorate. It doesn't matter who gets elected - government debt will continue to rise, pushing up inflation, which will cause trouble for economic activity.