False hope

For the first time since the US election, the sentix Sentiment for the precious metal gold turns positive. The rapid built up of positive attitude, however, is counterproductive for further price increases.
As selling pressure eases up, the price for the precious metal gold recovers– at least moderately. Hence, investors sentiment brightens significantly in comparison to mid of December. Lately, only 18% of survey participants indicate that they are “bearish” (pessimistic) towards the yellow metal. A fortnight earlier in December roughly 41% of participants expressed their bearish sentiment. Usually a favourable indication. However, during the same time the share of “bullish” (optimistic) market participants has nearly doubled from 14% to 28%.

  20170102 iif gold en

Technically, strong sentiment surges limit the upside potential of markets. Based on our statistics investors can expect a merely 1.5% increase over the next four to 16 weeks, on average. We currently do net yet reckon with a durable turnaround. Investors still show only comparably low levels of conviction in gold. Also, based on positioning data provided by the CFTC, investors’ portfolio rebalancing still lags investors’ market view.

Hence, we expect that it is going to take some time until market participants witness a new gold bull market.


The sentix Sentiment indices, which capture investors’ 1-month expectations for a broad range of financial markets, are calculated on a weekly basis since 2001 as part of the sentix Global Investor Survey. The sentix sentiment reflects human 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. A sentiment divergence mostly indicates more important turning points.


The latest sentix Global Investor Survey was conducted from 29-December to 31-December-2016 with 947 retail and institutional investors.

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