Hulbert Gold Sentiment At Record Lows

If you are sick and tired of reading Precious Metals sentiment updates on this blog, I do not blame you. As an author of a contrarian blog, my job is to report as an objective view as possible of sentiment indicators developing within the various asset classes. Right now, it seems that Gold is one of the few assets experiencing negative extremes worthy of attention, from a contrarian point of view. However, some of the readers disagree. Due to overwhelming focus towards the PMs sector in recent weeks, various individuals seem to think that I have turned into a die-hard Gold Bug. Obviously this couldn't be further from the truth. Let me explain. 

Within similar context, between August 2011 and November 2011, readers of the blog also held a view that I was a perma-bull on equities. If one was to consider previous posts here, here, here, here, here and here, one should understand today (in hindsight) why I pushed major attention towards stocks over other asset classes. Stocks were extremely oversold and sentiment was extremely depressed between August and November 2011. Furthermore, on relative basis, global equities were very attractive against Precious Metals, Commodities and Bonds.

However, conditions have changed since those days. Stocks, particularly in the United States, have experienced a tremendous rally over the last two years. From the lows on 04th of October 2011 at 1075 on the S&P, the index is currently up over 45% and has become extremely overbought. At the same time, margins have started to contract and revenues/earnings are also following. As majority of the investors have missed the rally, they are not paying attention to fundamentals as greed blinds their judgement. They seem to be playing the usual chasing game over the last several weeks, with sentiment obviously turning extremely euphoric.  (more)

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