Golden slope of hope
Not enough gold-market skepticism to fuel a new rally
ANNANDALE, Va. (MarketWatch) -- The yellow metal's drop Monday was not as big a surprise as it might otherwise have appeared to be.
That's because gold timers, after several months of skepticism that formed a wall of worry for gold's bull market to climb, earlier this month decided on balance to jump on the bullish bandwagon.
This meant that, from the viewpoint of contrarian analysis, gold no longer had strong sentiment winds blowing in its sails.
Indeed, the October issue of the Hulbert Financial Digest emailed to subscribers on Oct, 15, argued that "at least from a contrarian point of view, the easiest money in gold's rally is now behind us."
Ominously, gold timers on average are no less bullish today than they were in mid-October, despite the recent hiccups. The average recommended gold-market exposure among a subset of short-term, gold-timing advisers currently stands at 53.8%, unchanged from where it was on Oct. 15.
That exposure level is right in line with where gold exposure stood on each of the previous occasions over the last two years in which gold's rally failed.
All this suggests to contrarians that gold still has some downside work to do before enough skepticism returns to provide a strong sentiment foundation for a resumption of gold's uptrend.
Not enough gold-market skepticism to fuel a new rally
ANNANDALE, Va. (MarketWatch) -- The yellow metal's drop Monday was not as big a surprise as it might otherwise have appeared to be.
That's because gold timers, after several months of skepticism that formed a wall of worry for gold's bull market to climb, earlier this month decided on balance to jump on the bullish bandwagon.
This meant that, from the viewpoint of contrarian analysis, gold no longer had strong sentiment winds blowing in its sails.
Indeed, the October issue of the Hulbert Financial Digest emailed to subscribers on Oct, 15, argued that "at least from a contrarian point of view, the easiest money in gold's rally is now behind us."
Ominously, gold timers on average are no less bullish today than they were in mid-October, despite the recent hiccups. The average recommended gold-market exposure among a subset of short-term, gold-timing advisers currently stands at 53.8%, unchanged from where it was on Oct. 15.
That exposure level is right in line with where gold exposure stood on each of the previous occasions over the last two years in which gold's rally failed.
All this suggests to contrarians that gold still has some downside work to do before enough skepticism returns to provide a strong sentiment foundation for a resumption of gold's uptrend.
