Last week, Gold Alert put out an interesting note …
The latest reading of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which measures recommended market exposure by gold timers, plunged 14.3 points to 9.2%. The last time the HGNSI was at such a low level was on August 28, 2009, one week before the gold price surpassed $1,000 for the first time in seven months and one month before the price of gold broke out to a new all-time high.
Also from the same note …
The most recent Market Vane bullish consensus figure on the gold price stood at 63% - also the lowest since August of 2009. Gartman went on to refute the claims of investors and strategists who continue to claim that the gold price has reached “bubble” levels, noting that asset classes reach “bubble” territory when Market Vane bullish figures reach the 90-95% level. With regard to the gold price, the Market Vane bullish data has not surpassed the 89 level since March 2008 - when the price of gold first hit $1,000 per ounce.
XX Sean’s note: A Market Vane bullish consensus figure on gold of 63% is actually very low – the previous gold declines this year stopped at lows of 68%. And it is worthwhile to note that buyers in India finally loosened their purse strings when gold touched $1,200 an ounce.
Does this mean it’s time to buy gold? Personally, I’m hoping for cheaper prices (and a heck of a buying opportunity), but the lesson here is not to be surprised if gold takes off again. The market likes to climb a wall of worry, and that’s what we’ve got right now.
Four more interesting gold stories …
#1) Gold Large Commercial Net Shorts Drop Sharply
COT report shows largest one-week reduction in large commercial net short positioning for gold since Aug. 12, 2008 (23 months) and the fifth largest gold LCNS reduction in our records since 2003. Gold was -3.9% and the gold LCNS -14.1%. Silver -3.6% and the silver LCNS -10.5%. This is more bullish than bearish.
#2) Gold ETFs at record high of 65,697,224 ounces
Combined gold exchange traded fund (ETF) holdings rose 78,000 ounces in one week to a record high 65,697,224 ounces on 7 July. The rate of net additions to gold ETFs has slowed, reflecting a reduction in investor economic concerns.
#3) Markets Await Inflation Figures
Gold is lower in Asian and early European trading on low volume as the dollar has risen and renewed risk appetite has resulted in tentative gains in equity markets. Gold’s marginally higher weekly close last week was positive from a technical point of view and could lead to follow through this week as momentum following traders and funds “make the trend their friend”.
#4) Gold Falls as Euro Survives Crisis, EC Props Up Its Banks
In May and early June, Europeans who thought the euro was finished, dumped euros and bought gold. Then the EC and the European Central Bank (ECB) signaled that they will protect the euro and the European banks or die trying. The ECB’s secondary market purchases of PIIGS sovereign bonds, which began in May, helped send this message.And so, at least some traders who bought gold because they feared the end of the euro, sold gold and bought euros back.
Related Posts
- Gold Chart — Starting to Improve (02/16/10)
- 2 Charts and News on Gold and Silver (10/22/09)
- The China Gold Conundrum (02/18/10)
- GLD Chart and Story on Gold (06/14/10)
- Silver Transcript — Gold and Silver News — More! (12/01/09)
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