Sentiment Shifting For Gold Bugs [SPDR Gold Trust (ETF), iShares Silver Trust (ETF)]

So I am not calling a new bull market here, but I am calling a condition to one, which is a positive trend (subject to ongoing corrections like the current one) out of deeply depressed levels by the Gold Optix.

st.ag.optix

Silver is even better, as it became way over loved, conveniently right at the time we noted severely over bought technicals in nominal silver and in its relationship to gold.  If we were to go strictly by this graph (which we of course will not) it looks like silver is ready to bottom and turn up.

A view of how unhealthy silver’s sentiment backdrop became recently comes from the most recent spike in the Optix to near the red line, while the price of silver barely went anywhere.  Again, we cannot make foolproof claims about what lay ahead but what we can claim is that a bearish condition is gone, replaced by a more bullish one.

The bottom line is that while gold’s technical situation was compromised last week and silver is testing major support one more time (4th) than I personally find agreeable, the sentiment backdrop has become more favorable.  Not shown above are the Commitments of Traders data, which improved again last week, but have room to improve further.

This segment will probably be released as a public article to maybe try and convert one or two more people away from the stuff talking about weddings and war and corresponding sentiment traps that people in this sector all too often fall into from a bullish perspective.

Gold is getting drubbed in ratio to the US stock market and in the face of a strong US economy.  Those are facts and also fundamental considerations.  In seeking a macro pivot phase, we are looking ahead to a potential time of change, but easy connect-the-dots analysis is not going to bring such a phase on, no matter how often the wrong kind of gold bugs click the heels of their ruby slippers.

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