Intelligent bet remains on gold…(From Market Watch!!…WOW!!)
By Mark Hulbert
TEMAGAMI, Ont. (MarketWatch) — Some day, gold will wake up from its dreary, listless state and take off.
And, if contrarian analysis is right, that day will come sooner rather than later.
Of course, you have every right to be skeptical of this argument, since contrarian analysis has been bullish on gold for several months now and the yellow metal — so far at least — has failed to respond.
But contrarian analysis has been far more right than wrong about gold’s short-term gyrations over the last three decades, which in effect means that the intelligent bet over the years has been to bet against the consensus of gold timers.
And that consensus right now is decidedly bearish — and has been since March. In fact, the gold timers’ average gold market exposure over the last four months has been actually negative. That is, for four months now they’ve been betting that the gold market would go down.
That much persistent bearishness is unprecedented in recent history.
Consider the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold market exposure of a subset of short-term gold timers tracked by the Hulbert Financial Digest. Mar. 14 was the first date this year on which the HGNSI slipped into negative territory, indicating that the average gold timer was recommending that his clients be net short the gold market.