Gold Sentiment Resets: Prepare for the Next Bullish Phase Toward $3,000

Public sentiment of Gold Futures (graph & data from Sentimentrader.com) registered an extreme last month as the market was supposedly anxious about war abroad and the political war here in the US. Oh, and more importantly, there is the slowly decelerating economy and the Federal Reserve, weakening from its previously hawkish policy.

Gold and silver Commitments of Traders (CoT) data are also indicating over-bullish sentiment by speculators. But this all goes with a bullish market. I mean, just look at stocks. The stock market has been structurally over-bullish all year, periodically reset by little yips and twitches in sentiment. So why not gold?

The recent reset in gold’s public sentiment (Sentimentrader’s “OPTIX” reading) was more than a little yip. It was a pretty good clean-out of an extremely over-bullish gold sentiment profile. And it was necessary and predictable.

I have marked up the graph to show that in a real bull phase (e.g. 2018-2020) gold sentiment can get very overdone, reset, and then resume bulling after the MOMOs, FOMOs and various and sundry other cling-ons have been shaken out. That is the orange highlight. Our target for gold is, and bigger picture wise since 2020, has been 3000+. At some point thereafter will come a termination point. But the 2018-2020 phase illustrates how long that can take during a real bull phase (unlike 2016, for example).

When gold broke to blue sky in early 2024, 3000+ became a clear and present objective. But it was not going to get there all in one big gulp. Hence, the healthy sentiment reset of a bullish and once again future over-bullish market. But that’s how bull markets roll. Gold’s public sentiment profile has been reset and the gold price has refueled to take a shot at our target in the coming weeks or months.

Gold's public sentiment profile