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https://i-invdn-com.investing.com/news/LYNXNPEC3B0CQ_M.jpg
(Source: TC2000.com)
As evidenced by the above chart, gold is an emotional trade, with sentiment swinging from one extreme to another more than 14 times over the past decade. However, while we’ve seen multiple readings of extreme pessimism since 2012, all of these readings except one (Q3 2018) occurred in the 2012-2016 secular bear market. These readings denote instances when we have more than four market participants bearish for every one investor that’s bullish, with readings this extreme making sense in multi-year bear markets.
