| Gold is unlikely to embark on a sustainable rally any time soon. That is the conclusion of a contrarian analysis of gold-market sentiment. Take gold’s extraordinary volatility over the past few days, with gold plunging as much as $50 on Sunday before rallying just as much on Monday. Journalists and analysts struggled to provide rationales for the market’s behavior, and largely came up short. This is a dead giveaway that the market is being held up more by hot air than by fundamentals.
Sunday’s plunge, for example, was attributed to the failure of the Swiss initiative to require the Swiss National Bank to hold 20% of its reserves in gold. But a “no” vote was largely expected, so it’s hard to see why this outcome should have caused gold to fall by so much. Likewise, there was little to explain Monday’s big rally...............................................Full Article: Source
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