Sentiment impulse for gold!

Print

Written by Sebastian Wanke | 18 May 2015
Posted in Special research

As the latest sentix Global Investor Survey shows sentiment is clearly brightening for gold. At the same time, investors’ basic conviction for the yellow metal increases. Consequently, the improvement in sentiment is a kick-start signal for the market. This, in turn, points to rising gold prices in the coming months.

Last week neutrality was extremely high for the gold market. Many investors had no idea of what the next move of the gold price could be and thus stayed at the sidelines. With the technically important price rise and weekly close above 1.220 USD/Oz this neutrality has now transformed itself into a new trend impulse. The (short-term) sentiment for gold increases strongly, and at the same time investors’ basic conviction (sentix Strategic Bias) for the commodity advances, too.

201505018 iif gold eng

This constellation indicates that the adjourned game of the gold market is over. The sudden change in sentiment signals that investors are rediscovering gold as a welcome hedge in times of rising inflation expectations and a weaker US dollar. We expect the gold price to recover significantly over the coming months. In the second half of the year it should rise to levels of around 1.400 USD/Oz.

Background

sentix Sentiment, investors’ 1-month expectations for a given market, is polled on a weekly basis since 2001 as part of the sentix Global Investor Survey. It reflects the emotions – between greed and fear – of market participants. Negative sentiment extremes are usually a straight indication for rising prices. High optimism, in contrast, may be a warning signal for an upcoming market consolidation. More important turning points are mostly indicated by a sentiment divergence.

sentix Strategic Bias, investors‘ 6-month expectations, is also polled on a weekly basis since 2001 as part of the sentix Global Investor Survey. It reflects the strategic view of market participants as well as their basic convictions and perceptions of value for a given market. As this indicator represents investors’ general willingness to buy or sell it should not be interpreted as a contrarian signal. Rather it is usually leading the market by several weeks.

The current sentix Global Investor Survey was conducted from May 14th to May 16th, 2015. 970 individual and institutional investors took part in it.

We use cookies and third-party services that store information in the end device of a site visitor or retrieve it there. We then process the information further. This all helps us to provide you with our basic services (user account), to save the language selection, to optimally design our website and to continuously improve it. We need your consent for the storage, retrieval and processing. You can revoke your consent at any time by deleting the cookies from this website in your browser. Your consent is thereby revoked. You can find further information in our privacy policy. To find out more about the cookies we use and how to delete them, see our privacy policy.

I accept cookies from this site.

EU Cookie Directive Module Information