Previously bullish brokerages have given up on gold. Credit Suisse, JPMorgan and Goldman Sachs have recently slashed their gold price projections. I view this surrender as consistent with a possible contrarian signal.
Recognizing that the intrinsic value of gold is difficult to evaluate, now seems a propitious time to consider diversifying some portion of one's portfolio into gold. There is probably no better time to consider diversifying one's portfolio into a depressed asset class (e.g., gold) than when the crowd is optimistic about a vigorous and self-sustaining global economic recovery and when the world's stock markets are at record high prices. Gold, which had a speculative blow-off to the upside back in 2011 (18 months ago), now appears to have had a selling climax last month. Investor sentiment toward gold probably can't get much worse, and the growing optimism regarding the trajectory of global economic recovery may not get much better in the weeks and months ahead.