Mark Hulbert Asks If Short-Term Bottom Formed At $1,480

In his latest Marketwatch piece, Mark Hulbert points to some evidence that suggests gold has made the second half of a double bottom. In addition to the chart, which shows buying coming in at the $1,480 level, Hulbert's sentiment guage shows gold timers skittish. From a contrarian standpoint, that means there's little excitement and a lot of potential buying power to push gold up. Skittishness also suggests there isn't that much selling power left.

Consider the average recommended gold market exposure among a subset of the gold market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). The day after the first half of gold’s double bottom, for example, this average stood at 40.3%. It today stands at just 7.0%.

In other words, while gold is patiently doing the technical work to form a bottom, the average gold timer is building a wall of worry that bullion will be able to climb.

Hulbet does point out that it's possible for sentiment to rocket up should gold make a leap, which would be a bad sign sentiment-wise. Skepticism means that there's buying power still in reserve.