Research Excerpts

Gold: Value Area or More Weakness Ahead?

Posted on: Wednesday, May 14th, 2014

The following is a brief excerpt from today’s Investor Sentiment Survey, one of 8 different reports that we produce for clients throughout the month.

Investor Sentiment Survey is our analysis of a broad list of both asset flow- and survey-based measures of professional and retail investor sentiment, focusing on their directional implications for the major areas of the US financial markets including the US stock market, US interest rates, the US Dollar, and commodity prices including copper, crude oil, and gold.

Excerpt From: Investor Sentiment Survey
Asset/Market: Gold
Date: May 14th 2014

Chart 1 measures investor sentiment according to a daily survey of individual futures trader bullishness on gold prices, which is plotted since 2011 by the blue line in the lower panel.  A corresponding chart of COMEX gold appears in the upper panel.

COMEX Gold & Survey Of Individual Traders Bullishness

COMEX Gold & Survey Of Individual Traders Bullishness

The highlighted area in the lower right edge of the chart shows that these near- to intermediate-term oriented trend followers are currently hovering near 18% bullish, an historic least bullish extreme that the green vertical highlights show has previously coincided with or led every significant bottom in gold prices during this period.

continued in today’s report…

Asbury Research subscribers can view the entire report by Clicking Here.

Gold prices have been hovering near $1300 an ounce since February.  Since gold prices have historically been used as a hedge against inflation and/or a defensive place to shift assets during a stock market correction, not to mention their inverse correlation to long term US interests rates over the past 20 years, how they resolve this pivotal $1300 level will tell us a lot about the direction of US interest rates, the US stock market, and the broader US economy heading into the 3rd Quarter.

Asbury Research subscribers can view the entire report by visiting our Research Center.

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