If you’re looking for the most “hated” investment in the world today, gold is near the top of the list.
We’ve spent the past several months detailing how investors have completely given up on the metal. Just last week, my colleague Steve Sjuggerud explained that gold is the most hated it’s been in 17 years.
We can’t know exactly when the gold market will turn. But with negative sentiment piling up, it could happen soon. And the rally will likely be explosive.
Let me explain…
Measuring sentiment is simple… Follow the money.
Folks pour money into what they’re excited about… And they suck money out of ideas they hate.
Today, investors hate gold. Investor interest in the largest gold fund is hitting multiyear lows.
The fund folks are selling is an exchange-traded fund (“ETF”) you’ve probably heard of – the SPDR Gold Shares Fund (GLD).
GLD is a massive fund with around $30 billion in assets. It’s also the easiest way for investors to take a position in gold. You don’t have to worry about dealers, shipping, or storage like you would with physical gold… All it takes are just a few clicks in your online brokerage account.
That ease of use also means folks can flee GLD quickly. And that’s exactly what we’ve seen in recent months. GLD’s total shares outstanding just hit a multiyear low. You can see it in the chart below…
When it comes to ETFs like GLD, changes in shares outstanding are a powerful tool. They give crucial insights into what folks think of an investment right now.
That’s because funds like GLD create and liquidate shares based on demand. So a rising share count means folks are excited to buy… And a falling share count means folks want out.
Based on this measure, investors haven’t hated gold this much since February 2016. They want out, and they’re selling fast.
That’s what I love to see. I always look for hated investments. And gold is absolutely hated today. The only thing missing is the uptrend. Prices haven’t begun to rally yet.
For now, we are watching gold closely. We’ll let you know when the uptrend returns and it’s time to buy.
Good investing,
Brett Eversole
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Source: Daily Wealth