Interview Sprott US Media Jim Rickards There Will Be a War On Gold
It’s bearish for gold that market timers have been remarkably upbeat in the face of gold’s dismal performance this year.
In fact, despite gold bullion US:GCQ8 falling $140 an ounce since its January high, the average gold timer I track has not turned outright bearish. From a contrarian perspective that means that a tradable gold bottom is not yet upon us.
Consider the average recommended gold-market exposure level among monitored gold timers, as measured by the Hulbert Gold Newsletter Sentiment Index (or HGNSI). It currently stands at 0%, indicating that the typical timer is out of the gold market but not outright short. The current index level is right in the middle of its historical range, which extends from minus 56.7% to plus 89.7%.
The question that contrarians are asking: Why, if gold has performed so poorly, are gold timers on balance no worse than neutral?
As I mentioned in a column in late June, tradable gold bottoms typically are accompanied by HGNSI readings at least as low as minus 30%. Because the HGNSI at that time had not gotten any lower than minus 13%, I concluded that “gold’s losing strike may get even worse.”