(MarketWatch) – Golds $30-plus drop today – the biggest daily decline of the year – serves as a powerful reminder that the market for the yellow metal remains vulnerable to shifts in investor mood. That’s because there’s more bullishness than bearishness today among the gold traders, which, in turn, means its more likely that shifts in mood will cause gold to fall than to rise. To put that into context, consider that as recently as early June, the HGNSI stood at minus 30%.
According to contrarian analysis, major market bottoms are more likely to be greeted by stubbornly held bearishness — just the opposite of what we’ve seen recently. Only well into the new bull market will market timers be eager to jump back on the bullish bandwagon.
See full story on marketwatch.com
Photo courtesy of MarketWatch