June 7, 2011, 12:01 a.m. EDT
Gold traders strangely subdued
Commentary: Traders apparently oblivious of gold’s recent strength
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — It is unrealistic to expect contrarian analysis to identify a bottom within 24 hours of its occurrence.
But it nevertheless came close to pulling off just such a feat on the occasion of gold’s May 17 low at $1,480 per ounce. The very next day, contrarian analysis concluded that “evidence is growing that gold has formed at least a short-term bottom” and that “the stars appear to be aligning in favor of the yellow metal.”
But it nevertheless came close to pulling off just such a feat on the occasion of gold’s May 17 low at $1,480 per ounce. The very next day, contrarian analysis concluded that “evidence is growing that gold has formed at least a short-term bottom” and that “the stars appear to be aligning in favor of the yellow metal.” ( See May 18 commentary. )
So what is contrarian analysis saying now, with gold trading for $65 more than where it closed on May 17?
The key variable is whether gold traders have used the rally over the last three weeks to quickly jump back onto the bullish bandwagon. That would be a bad sign, according to contrarians, suggesting that gold’s rally will quickly run out of steam.
Fortunately, the return to bullishness among gold traders has been quite restrained. As long as the timers only begrudgingly turn bullish in the face of a strong market, contrarians will continue to give gold’s rally the benefit of the doubt.
Full story: http://www.marketwatch.com/story/gold-traders-strangely-subdued-2011-06-07?dist=beforebell
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
| 