For the first time in months, contrarians are giving gold
GC00 the benefit of the doubt. The source of this big shift was market timers’ response to gold’s “flash crash” in late October. The average gold timer quickly threw in the towel when gold prices fell, indicating that their exuberance — which had so alarmed the contrarians — was weak. It would have been far more worrying, from a contrarian point of view, if the gold timers had stubbornly held on to their optimism as gold declined.
It would be going too far to say that contrarians predicted the late-October flash crash, since they’ve been predominantly bearish for most of the year. Still, just a month ago contrarians believed that the gold rally was “living on borrowed time” and that they would “get the last laugh.”
The gold rush is over. October’s ‘flash crash’ is just what buyers needed.
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For the first time in months, contrarians are giving gold
GC00 the benefit of the doubt. The source of this big shift was market timers’ response to gold’s “flash crash” in late October. The average gold timer quickly threw in the towel when gold prices fell, indicating that their exuberance — which had so alarmed the contrarians — was weak. It would have been far more worrying, from a contrarian point of view, if the gold timers had stubbornly held on to their optimism as gold declined.
It would be going too far to say that contrarians predicted the late-October flash crash, since they’ve been predominantly bearish for most of the year. Still, just a month ago contrarians believed that the gold rally was “living on borrowed time” and that they would “get the last laugh.”
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