Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Investors Hated Gold at Precisely the Wrong Time: What About Now?

Commodities / Gold and Silver 2014 Nov 22, 2014 - 10:45 AM GMT

By: EWI

Commodities

Sentiment extremes often foretell major turns in financial markets

Editor's note: You'll find the text version of the story below the video.


I came across this sentence in an article about gold:

Nobody expects gold prices to turn up soon...

Another observer put it this way:

There doesn't seem to be anything on the horizon that will make gold prices go up.

It would be easy to think these comments published last week, when gold's price reached a 4 1/2 year low ($1,131.85).

But in fact, those comments published on February 12, 2001 -- within days of gold's major low of $253. Many investors missed the ten-year bull market in the yellow metal that followed.

The peak of that bull run was Sept. 6, 2011, when gold reached its all-time high of $1921.50. The then-prevailing sentiment was the opposite of 2001. A major global bank announced that gold's "fair value" was $10,000 an ounce.

We had a different point of view. Just four days before gold's top, The Elliott Wave Financial Forecast featured this chart and commentary.

Commodity fifth waves in major rallies often end in a final spike higher. ...

Gold's wave structure is consistent with a terminating rise. As this monthly chart shows, prices exceeded the upper line of the channel formed by the rally from the 1999 low in what Elliott terms a throw-over. A throw-over occurs at the end of a fifth wave and represents a final burst of buying, as the last sub-waves of a rally conclude.

Financial Forecast, September 2011

Sentiment extremes often accompany major trend changes in financial markets. The Daily Sentiment Index (trade-futures.com) showed 98% gold bulls around the time of the yellow metal's all-time high. More than that, a Gallup poll showed that Americans considered gold to be the best long-term investment.

Since then, the price of gold has fallen by over a third.

Now, pessimism is again the prevailing sentiment surrounding gold.

On November 10, an analyst told CNBC: "I don't see a reason why gold prices would continue going up - there are more reasons for prices to go down." The head of precious metals at a Canadian bank says, "The [gold] market still looks vulnerable.'"

On November 7, the largest gold-backed exchange-traded fund saw its biggest one-day outflow in nearly three weeks. October saw its biggest monthly outflow of 2014.

What's next for gold? You may have guessed, the sentiment is again suggesting that the majority opinion (bearish, this time) will be proven wrong.

New Free Resource: The Gold Report -- 2015

New technical analysis, eye-popping sentiment studies, why most analysts missed gold's 2011 top, plus a BIG near-term opportunity developing for gold investors right now. Log in to read the report now ยป

Don't have a login? Complete your free Club EWI profile to get immediate access to this report >>


This article was syndicated by Elliott Wave International and was originally published under the headline Investors Hated Gold at Precisely the Wrong Time: What About Now?. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in