Gold: Can Sentiment Get Any Worse?
Tommy Humphreys | Dec 23, 2013 12:51PM ET
The results from our One of the Most Famous Gold Bug Fund Managers has Gotten Obliterated ” -- if an 85% decline in Mr. Sprott’s assets under management is any indication, investors have completely thrown in the towel on the precious metals sector.
From our vantage point gold has been hit with an incredible confluence of bearish macro news during the past few months – a quick run down:
- Global economic data has steadily improved throughout 2013
- Yields have been in a steady uptrend since April and gold bulls can no longer cite negative real interest rates in their bull thesis
- Inflation remains conspicuously absent – if anything, disinflation is prevalent
- The Federal Reserve’s “taper” has begun
- Investor perception of ‘tail risks’ has dropped drastically throughout 2013
- The high gold demand BRIC countries (Brazil, Russia, India, China) continue to wrestle with economic slowdowns and uncomfortably high levels of consumer price inflation
The list could go on but the point is clear:
Gold has become a losing trade to many recent investors who are now caught gazing starry eyed to the recent performance of the US stock market. It won’t be any coincidence when gold bottoms within a few weeks of a major top in US equities.
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