GOLD SLUMP MAY HAVE GONE TOO FAR FOR TRADERS
Gold TVC:GOLD has lost much of its lustre in recent months, but SentimenTrader argues the selloff may now have gone too far for short-term traders to ignore.
The SPDR Gold Trust AMEX:GLD (GLD), the world's largest gold-backed exchange-traded fund, has slumped almost 30% since peaking in January 2026, leaving it below its 200-day moving average and firmly in a downtrend. For long-term investors, that remains a warning sign.
However, Jay Kaeppel, senior research analyst at SentimenTrader, sees a more constructive setup emerging for aggressive traders willing to bet on a bounce.
Kaeppel draws a clear distinction between investing and trading, with the latter focused on profiting from shorter-term market swings rather than long-term wealth accumulation..
His main support for a bullish trading stance is sentiment.
SentimenTrader's GLD Optix indicator, which measures investor optimism towards gold, recently fell below 36%, a historically depressed level that suggests bearish sentiment may have become excessive.
As Kaeppel puts it: "The implication is that trader sentiment has gotten overdone to the downside and that - if history proves an accurate guide - the price of gold could reverse higher in the months ahead."
Here's our latest gold report: Gold set for biggest quarterly fall since 2013 on hawkish Fed stance