While I find the public opinion data (like Sentimentrader.com‘s ‘OPTIX’) to be too jumpy from week to week to set your watch by, one thing that is more stable is the status of gold bugs either putting their money where their (sometimes big) mouths are, or withholding same.
The discount to NAV in the Central Fund of Canada’s bullion vaults is dropping back toward the discount levels registered a year ago during the depths of the bear market. Price-wise that is a broken chart, as it has made a lower low and lost the supportive weekly moving average. But I can tell you that one thing needed to make the metals a ‘buy’ again is for revulsion among the bugs the return. Gold and silver are being offered at a discount here, implying a big decline in confidence within the cult community itself.
When the almost ritualistic ‘running of the gold bugs’ is complete, we may have a big opportunity in the metals, assuming the stock market plays its favored role in sucking the holdouts in to a political promotion and then trapping them. The markets from here on are officially very interesting.
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