(Uh Oh) Gold timers more bullish than they've been in five months

As a follow-op to yesterday's "Hot War in Gaza, Cold War in Pakistan and Gold is Only $880 an Ounce? Sounds Like a Short to Me.", MarketWatch reports:

The editor of the average gold-timing newsletter is more bullish today than he has been in nearly six months.

That is not encouraging from a contrarian point of view.

In fact, the last time the average gold-timing newsletter was more bullish was July, when gold

bullion was trading for nearly $1,000 an ounce. Gold or less promptly commenced a two-month correction in which it lost about $200 per ounce.

Consider the latest readings of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended gold market exposure among a subset of short-term gold-timing newsletters tracked by the Hulbert Financial Digest. As of Monday night, the HGNSI stood at 60.9%.

When gold bullion approached the $1,000 level in mid July, in contrast, the HGNSI was barely higher, at 64.3%.

To be sure, a contrarian analysis of gold sentiment over the past year wasn't always as successful as it was this past July. But it's been right more often than wrong, not only in 2008 but over the last two decades that I have been carefully tracking gold market sentiment....MORE

Gold was recently trading at $874.30.