With Sentiment In The Gutter, Will Gold Stage A Rally?

A week ago Friday, the metals got clocked hard. It was a drive-by “paper gold” shooting on the Comex which took place after most of the rest of the world had gone home for the weekend. On Monday, the Hulbert Gold Stock Newsletter Index fell to zero. On Tuesday it dropped to negative 2.7. The HGNSI is an index that measures newsletters which make trading recommendations on mining stocks. A negative reading means, overall, the newsletters are net short in terms of position recommendations. Zero and negative readings are typically highly correlated with bottoms.

Since I’ve been following the HGNSI (since 2005), it has been a remarkably accurate contrarian signal. However, it does not offer any information on the timing of a move higher. That, of course, is always the money question. What I can say, however, is that if you have cash to put to work in the sector now is a good time start slowly buying into your favorite ideas.

There’s a growing feeling among long-time gold investors like myself that precious metals will potentially stage a surprise move higher in the near future. Note how I do not define “near future.” This is because Central Bank intervention makes it next to impossible to forecast over the “near future.” It’s this way now with all markets, not just gold and silver.

My friend and colleague, Chris Marcus of Arcadia Economics, invited me onto his podcast to discuss the precious metals market, stock market, Deutsche Bank and the general economy:

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Visit these links to learn more about the Investment Research Dynamic’s  Mining Stock Journal and  Short Seller’s JournalThe mining stocks are historically cheap and percolating for a big move higher.  My subscribers and I are making a lot of money shorting and buying puts on homebuilders and I’ve updated my recommendations ahead of this week’s earnings reports from Lennar and KB Home.

7 thoughts on “With Sentiment In The Gutter, Will Gold Stage A Rally?

  1. It’s getting close , summer around the corner in USA.
    I wonder if they hate gold why then , HSBC, Citicorp ,J.P Morgan invest so much in Australian gold producers ??!

  2. For the moment, all players in this rigged system – sovereigns and banks – continue to participate in this global ponzi, because it is still lucrative. China and Russia benefit for a number of reasons not least is the fire sale price of gold. At some point, however, someone will upset the equilibrium, pull out, or sabotage it. That’s when we will see just how little control the masters of the universe have.

    Because of the years of financial repression and market control, I’m thinking more and more that we’ll witness a big bang – a market discontinuity. We’ll wake up on a Monday morning and find gold and silver multiple times higher and if you’re not in beforehand, you’re not getting in then.

  3. The “near future”could be decade away when you’re long dead. This didn’t help any investors. Maybe you should tell your subscribers to invest in more lucrative market areas.

  4. Dave, I was 28 years old when I got red pilled and started learning about Fed reserve banking system and the fiat ponzi in which we’re all enslaved under thought I was a contrarian then & started stacking PHYZZ. I am now 35 turns out I was just buying the top, i have dollar cost avg all way down until about 1st quarter 2017 never giving up on the principles that drew me 2 the space. “Near future” is realitve, I’ll admit the cabal has been testing my resolve as of late. Given In your honest opinion do you think it would be realistic to expect me to escape velocity from my 9-5 based on my investment (stacking) b4 the traditional expectations of retirement?

    1. No idea. Measuring from 2001 to now, gold has outperformed the SPX/Dow. I personally think
      we’ll see much higher over the next few years but who knows.

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