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Gold Establishes Long-Term Low: Where To From Here?

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Summary

  • Gold investor sentiment hit major low in summer 2015 prior to price low.
  • Recovery from the 2015 bottom has been erratic but gradual.
  • New bull market in gold has room to run until investors become enamored once again.

Gold prices hit a 10-month high on Tuesday as the U.S. dollar index (DXY) fell to a 52-week low. Gold has rallied nearly 15 percent since last December when a major intermediate-term low was established. Heightening tensions between the U.S. and North Korea have been one contributing factor to gold’s recent gains, as have concerns among investors over the U.S. equity market outlook. Regardless of the reason, investors have been flocking to the perceived safety of the yellow metal of late – a trend which shows no signs of diminishing.

There are indeed plenty of worries to keep the price of gold buoyant in the short term. Serious investors, though, are wondering about gold’s long-term prospects. To wit, has a major long-term low been established for gold after the bear market which began in 2011? Major long-term market bottoms can only be identified with absolute certitude in retrospect. That said, investor sentiment can provide clues as to the likelihood of a major low being made. By taking the emotional pulse of market participants in the aggregate, the big picture for an asset can become clear even when the market environment is muddied by conflicting opinions and price volatility.

Read the full story on Seeking Alpha.


Source: https://www.goldeditor.com/articles/2017/gold-establishes-long-term-low-where-to-from-here/


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