Mark Hulbert: Gold to Fall Further

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Gold is likely to fall further before it rallies is Mark Hulbert’s headline. In support of his thesis he presents the latest Hulbert HGNSI:


Plucky gold timers are indeed in bottom scouting mode, which tends not to be good because gold usually bottoms amidst the worst of sentiment, not when it is being micro managed by every wise guy on the planet. From Hulbert…

“Worth focusing on is how the gold timers reacted to the geopolitical tensions surrounding Ukraine. After Russia took control of the Crimean peninsula in late February, the gold timers jumped on the bullish bandwagon”

Nobody ever said the gold timer community was smart. Crimea has really messed up the gold market because there are so many people who think in cartoons or thought bubbles involved. The ‘gold timers’ are dumb money extraordinaire at turning points. So they may indeed have to totally go full bear before reversal. The latest available CoT data does not look fully cooked yet either.

But I would question whether Hulbert’s HGNSI needs to decline to the same sub -50% level or gold’s CoT to the same extreme before it bottoms. That is because there are different types of corrections and different types of bottoms. In other words, is this correction heading to a major intermediate low like the ones from last June and December? If it is, then the HGNSI is going much lower (and CoT to an extreme like in June and December).

But if gold is simply on a reactive correction after a significant low (December retest of the June low) sentiment does not need to decline to wrist slitting levels. Really, I have no need to care one way or the other which scenario is in play. I am a gold bull for the long term but not a cheerleader and am mostly just sitting in the waiting place…

…for people just waiting.
Waiting for a train to go
or a bus to come, or a plane to go
or the mail to come, or the rain to go
or the phone to ring, or the snow to snow
or waiting around for a Yes or a No
or waiting for their hair to grow.
Everyone is just waiting.