Everyone Is Bearish On Gold

The markets were closed today so I spent the evening going through my charts and reading up on various markets.

I came across the put/call ratio for XAU (gold index) and was surprised to see that this ratio is at a very high level. From a contrarian point of view this is quite bullish because in the past whenever this ratio reached such a high level, a bottom in gold developed.

So based on such bearish sentiment in the gold market, I will be looking to get long GLD at some point.

I'd like to see the market consolidate for a few days and then break higher like it did last March (shaded area) before I do any buying.

The purpose of this post is to let those of you who are interested in gold know that a bottom may be forming based on an enormous amount of bearish sentiment. Let's keep an eye on this metal.