Tuesday April 10, 2012
Mark Hulbert's HGNSI Hulbert Gold Newsletter Sentiment Index is the lowest it has been since March 2009. That minus 15.7% reading is therefore actually bullish. Low sentiment readings usualy precede a rally. We have been recommending adding gold positions via Central Fund.
GDX to Gold Ratio Chart
While we do not have the HGNSI handy, this ratio chart makes the same case. The ratio of Market Vectors GDX to gold is back to late Fall 2008 levels. At that time gold shares were very much out of favor. And of course that led to a substantial rally as one can see. It appears a similar event is taking shape now. We cannot know how long this wil take, that is for a bottom to form. That is why a succession of orders at lower prices is the best way to enter this trade.
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