$BPDGM: Gold Investment Sentiment: Risk In Gold And Gold Investments – How Low Can It Go?

Wed, Apr 17, 2013

Gold Investment Research

The bad news is gold prices have collapsed, the downtrend is strong, and there’s still a lot of risk in Gold and Gold investments.

The good news is that Gold Investment sentiment can’t get any worse.

best gold to buy for investmentOne of the best indicators of the current sentiment in Gold Miners Bullish Percent Index ($BPGDM).

Last week we noted how the $BPDGM fell to five out of 100. That was the lowest the rating has been in years. And for contrarian investors, it was a sign to keep an eye on gold and gold investments.

What happened next brought a lot more eyes than just those of  Contrarian Investors.

The price of gold dropped $180 in two days. And along with the drop went any prospect of a near-term turnaround in gold and gold stocks.

That’s because the sentiment around gold investments as tracked by the $BPGDM index has hit its lowest possible level:

As you can see, the sentiment score surrounding gold stocks is sitting at zero.

And if you look at past turnarounds, it will take at least a few months for sentiment to turnaround enough where significant buying to push up the prices of gold stocks.

gold best investment

That means there’s only one move to make right now when it comes to gold investments. And it’s something you’ve heard here for months that’s paying off exceptionally well.

Last week when we noted how gold investment sentiment was at multi-year lows, we advised that it that the record low sentiment “doesn’t mean gold stocks can go down further. They can.”

But even now that gold prices are nearly $200 lower per ounce there are still no near-term catalysts to turn the trend around. So our gold investment advice remains the same as it has been since gold prices started to fall months ago.

If you don’t own any gold, buy some. If you are looking to buy more gold, wait for the downtrend to turn.

Right now the trend in gold has not turned. Invest accordingly.

Good investing,

Andrew Mickey
Executive Editor, Contrarian Insights

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