The conclusion from UBS? As analyst Julien Garren explains in a note, the role the U.S. economy plays in influencing commodity prices is a delicate dance, but providing investors can be patient, it's a winner for gold. Part of the selloff for gold (BAML's technical analysis team sees gold's "longer-term upside potential into the $2,100-2,300 to $3,000 range") thinks the sentiment reading is a positive sign.
In a note to clients, he writes:
While gold has taken a significant hit as of late, it remains above the pivotal 1,522/1,533 17m range lows. Against here the larger bull trend remains intact. Note that sentiment has now reached its LOWEST LEVELS SINCE 2008. From the perspective of contrarian opinion analysis, a bottom and bullish turn in gold is close at hand.
The sentiment indicator BAML tracks seems consistent with the latest CFTC data, which revealed that fund managers have placed their biggest bets against gold since at least June 2006.