Hulbert’s contrarian analysis: Golden wall of worry
Via Kitco / Marketwatch: Newsletters’ sentiment supports continued market strength
Consider the latest readings of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended exposure to the gold market among a subset of short-term gold timing newsletters tracked by the Hulbert Financial Digest. As of Monday night, the HGNSI stood at 33.9%. To put this into perspective, consider that at the end of July, when gold bullion was trading just above the $660 level, the HGNSI stood at 51.8%.
The HGNSI’s highest level in the days leading up to that peak was 73.2%. Yet here we are, some 16 months later, at more or less the same level for gold bullion, and the HGNSI is less than half as high.
The Indian rupee remains strong and this has muted the strength in domestic gold prices; GOLDSHARE (the UTI Gold ETF) rose from 880 to 940 over the past month (up ~7%), while gold prices in dollars went from $655/oz to $720/oz (up 10%).
With the over-hyped US Fed meeting out of the way tomorrow, I hope to see more action on this front - rate cut or not.
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