Investors Flee the Top Gold Fund

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.

Today, we have another easy way to see what's going on. It's not a 17-year low in sentiment... but it's another sign that investors hate the idea of owning this precious metal.

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

Further Reading

"Before you can even consider going against the crowd, you have to wait for the crowd to reach an extreme position," Steve says. Recently, he explained more about what this means for gold. Read more here... Contrarians, Take Note: Gold Hits 'New Milestones of Misery.'

Examining an ETF's number of shares outstanding is one of Steve's favorite methods for determining investor sentiment. Recently, he noted an extreme in another hated corner of the market... Learn more here.

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Commodities in general have fallen hard in recent years. And like gold, investors don't seem to care about these other commodities either. That's exactly what we want to see as contrarians...

Market Notes


Today's chart shows how one business "bucked the trend" of rapid smartphone adoption...

Apple (AAPL) released the original iPhone in June 2007. That hurt GPS-technology company Garmin (GRMN). Over the next decade, its GPS devices for cars steadily fell out of use... and sales for the segment dropped 70%. Thanks to smartphones, most of us never go anywhere without an interactive map in our pockets. But Garmin found new paths to success...

The company pushed GPS technology beyond the occasional road trip... and into growing areas like sports. This year, Business Insider ranked Garmin's Vivosport fitness tracker as the best in the market. It now competes with popular names like Apple and Fitbit (FIT). All told, Garmin recently reported almost $900 million in second-quarter revenue... And 80% of that came from its fitness, marine, aviation, and outdoor segments.

And as you can see, GRMN is up nearly 30% over the past year. Shares recently hit a multiyear high. While new tech trends always keep companies on their toes, flexible and innovative businesses find a way to thrive...