The Daily Sentiment Index showed a reading today of 6% bullish for gold and 6% bullish for silver. This means that 94% of traders believe that gold and silver are going lower.
The main headline running across CNBC today:
"Gold's Death Cross Isn't All Investors Are Worried About"
I had the pleasure of coming across a similar article written back in June of 2008 from CNN. Here was the title:
"Gold: Don't count on $1,000"
From the article:
"Most financial planners and market strategists say that people should only have a very small percentage of their portfolio dedicated to gold. It is, after all, an incredibly volatile investment. And betting on gold often means that you're taking a leap of faith about currency and interest-rate fluctuations as opposed to looking at fundamentals like sales and earnings growth."
8 months later the share prices of stocks based on those fundamentals like sales and earnings growth would be down about 60%, just as gold was touching $1,000.
An intelligent (non-mainstream media) argument against the price of gold would be based on how it may perform if we re-entered a deflationary type scenario seen in late 2008. I have discussed my thoughts on this scenario in the following article:
Why Precious Metals Could Surge During A Deflationary Bank Run
