CHAPEL HILL, N.C. (MarketWatch) — It’s not clear what it’s going to take to send gold investors into complete and utter despair, but contrarian theory won’t turn bullish on the yellow metal until they do.
It’s not as though gold investors haven’t given plenty of opportunity to become despondent. The precious metal is now in its fourth year of a major bear market, down more than 40% from its 2011 peak near $2,000 an ounce — including another drop of $22 on Tuesday.
And, yet, the gold timers I monitor act as though every gold rally is the beginning of a new bull market. According to contrarian analysis, a truly significant market bottom won’t be established until the gold timers stop being eager beavers, believing that every uptick means that happy days are here again.
Their eagerness to turn bullish was on...