Gold Slides With World Markets

Updated from 11:39 a.m. EST

Gold slid again Monday as investors scrambled to raise cash while stock indices slid across the globe.

Contracts for April delivery of gold dipped $4.90 to close at $639.20 an ounce on the Comex division of the New York Mercantile Exchange. Those exchange-traded funds that hold bars of bullion were retreating also, with streetTracks Gold Shares (GLD Quote) and iShares Comex Gold Trust (IAU Quote) both lower by 0.8%.

Asian markets kicked off the week sharply lower with major indices down in Tokyo, Hong Kong and Singapore. The downdraft continued as the European and North American markets successively opened.

The effect on gold was another soft session as stock investors hurried to find cash for margin calls and so liquidated futures holdings, such as gold. But at least one observer believes that the worst effects could be over for the yellow metal.

"Most of the liquidation that needed to get done has probably been effected," says Dennis Gartman, editor of The Gartman Letter, adding that at current levels the price could provide a good opportunity to start layering in buy orders.

Early in the session prices fell as low as $635.20 before rebounding somewhat, helped no doubt by midsession strength in the Dow Jones Industrial Average, which recently was up about 18 points at 12,132, after opening down.

Gold now rests right on top of long-term price trend lines, which should provide some steady technical support, so long as oil prices don't come tumbling down, Gartman says.