- MarketWatch photo illustration/iStockphoto Gold’s plunge last Friday is not the end of its struggles. That’s because, even in the wake of Friday’s plunge, gold investors are still exuberant. This absence of bearish fear suggests to contrarian analysts that more downside is ahead for gold GC00. Most Read from MarketWatch Consider the average recommended gold-market exposure among a sample of several dozen gold-market timers monitored by my performance-auditing firm. (This average is represented by the ...

Core Viewpoint - The recent decline in gold prices is attributed to persistent bullish sentiment among investors, indicating that further selloff may be imminent [1]. Group 1 - Gold prices experienced a significant drop last Friday, but the bullish sentiment among investors remains high [1]. - The lack of bearish fear among gold investors suggests that contrarian analysts predict more downside for gold prices [1].

Core Viewpoint - The recent rally in gold prices, reaching the $4,000 level, is considered unsustainable according to contrarian analysis [1] Group 1 - The analysis suggests that the current surge in gold prices is based on temporary factors rather than fundamental strength [1] - There are indications that the market may be overbought, leading to potential corrections in the near future [1] - Investors are advised to be cautious as the rally may not be supported by long-term demand trends [1]

Group 1 - The stock market's reaction to Federal Reserve rate cuts is not consistently positive, with historical data showing that in 40% of cases, the market was lower a month later, 37% lower after six months, and 27% lower after 12 months [1][2][3] - The market tends to rally when rate cuts occur in a strong economy, while it declines in a weak economy, indicating that the context of the rate cut is crucial [2][3] - Following a weak August jobs report, which increased the likelihood of a rate cut, the S&P 500 futures initially rose but then reversed, suggesting concerns about a potential recession [3][4] Group 2 - The correlation between daily changes in the S&P 500 and the probability of a Fed rate cut supports the notion of a market downturn post-rate cut [4][5] - Contrary to common belief, the S&P 500 performed better on days when the projected fed-funds rate was higher than the previous day, indicating an inverse relationship [5]