GoldMinerPulse: Market Sentiment Track Record

Chart for 22 March 2013 market close plus outlook for week ending 29 March 2013.

GoldMinerPulse Market Sentiment (MS) Metric Track Record

22 March 2013 View After Market Close: MS Up Slightly From Multi-year Lows.

  • The Kitco Gold Survey of market participants completed 22 March 2013 has 79% of the participants bullish while 14% are bearish and 7% neutral. Taking the Kitco survey results as a contrary indicator suggests next week is more likely to be neutral or bearish.

  • Outlook for Week Ending 29 March 2013

    The MS trend suggests the trend for the week ending 29 March 2013 is likely in sideways / neutral pattern as a base of support is built on last week's multi-year MS lows. The continued strong SGE market for physical gold suggests further gold price drops are unlikely, especially given the Cyprus fiasco engineered by the EU and IMF. The 21 March 2013 comments from Medvedev, and their likely impact on gold (i.e. euros flowing into a gold as a safe haven) are well worth considering. Will the recent pattern of money flows in the US dollar in troubled times final transition into money flows into physical gold in times of financial stress? This is most certain to happen eventual and first evidence of such a move may account for the record physical gold delivery on 22 March 2013 at the Shanghai Gold Exchange. Since bottoms are always formed around market sentiment lows, given the strong physical market support, and given the developments around the Cyprus fiasco, I believe now continues to be an excellent time to add to physical gold holdings and for additional leverage to add to gold and silver producer equitites (this is opinion and not investment advise). When the MS trend does turn up, I believe current gold and silver equity prices will be viewed as recognized as great bargains.

    The key metric to watch for next week is the price premium and daily delivery quantities for gold on the SGE. Will large daily physical gold delivery volumes continue from last week or even grow? The key event to watch is the gold market reaction to the unfolding of events in Cyprus and the second week of the Cyprus bank holiday. Given the Medvedev comments from 21 March 2013, the price of gold in euros should be interesting in the coming week.

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