A Few Interesting Data Points

It has almost become a matter of routine that we write about new extremes in a number of market data related to gold (specifically sentiment data) and after Friday’s massive shellacking several such extremes have occurred again. Note that not all of these are historic firsts, but two actually are.

We present them without any additional interpretation. In a highly emotional market, even just one or two days can make a big difference in terms of where prices end up. Still, there were certainly a few noteworthy developments, all of which are not surprisingly conveying that sheer panic broke out in the gold market last week. 

 

A word of caution: if a severely oversold market just keeps falling, then there  is sometimes a lot more short term downside in store. We’re not saying that this is likely to happen in gold’s case, we just want to point it out as a general rule of thumb. The higher probability is actually that extremes in sentiment and other ‘oversold’ readings result in a near term reversal, but one should be aware that there are occasionally exceptions.

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