About two weeks ago we looked at several measures of gold sentiment. The cross currents were a bit confusing but the DSI stood out since it was at the highest level of bullishness ever for that indicator since its inception in 1987! My final opinion was to defer to the parabolic nature of price and stand aside for a correction.
The precious metal finally succumbed to selling pressure and fell along with the already weak equity markets. To be honest, I haven’t really given gold enough credit during its impressive bull run these past few years. I’m wary of becoming a starry eyed gold bug so I prefer to rent it just like any other trade. I’m too quick to see a parabolic blow off but not objective enough to recognize the irrepressible power of a secular bull market in full swing.