16 for 16: Every Wall Street Analyst Is Bullish on Gold. Retail Just Got Cooler.

Sixteen analysts. Sixteen bullish votes. Zero bears, zero neutrals. That’s Kitco’s weekly Wall Street gold poll this week, and it’s the most unanimous read this poll has given us.

Here’s what makes it strange. Retail moved the other way. Among 220 Main Street voters, 58% are bullish and 24% are bearish. Four weeks ago, 78% of 211 voters were bullish and 12% were bearish. The pros got more certain. The crowd got less.

We’ve Seen This Poll Before

On August 23, this site wrote about the last time Wall Street looked this one-sided. Eight of 11 analysts were bullish, three were neutral, none were bearish. Gold had just closed the week above $4,600, up more than 5%.

I said then that a lopsided poll is a sentiment reading, not a forecast. It’s worth checking how that went. Gold finished this week around $4,377. That’s roughly 5% below where it stood when the analysts were merely mostly bullish. The consensus didn’t get proven right. It got tested, and gold lost ground.

What Actually Happened This Week

Gold opened the week at $4,340, fell to a low of $4,261.80 on Wednesday, then climbed to $4,400.60 on Friday. That’s a weekly gain of about 0.9%, per Kitco. Marc Chandler, quoted in the same piece, noted it was the first weekly gain in four weeks, and a small one.

The Fed hiked 25 basis points on Wednesday to a range of 3.75% to 4.00%. The vote was unanimous, and 16 of 18 policymakers see another hike before year-end. Gold sold off on the news. Then oil dropped for a third straight session, yields came off their highs, and the dollar softened, and gold clawed back the damage. You know that part. What’s new is what the analysts did with it: they all looked at a volatile, barely positive week and decided the answer was up.

Read the Split, Not the Score

I’m not calling a top. Sixteen professionals may well be right. But look at who’s doing the buying. Retail bullishness cooled and bearishness doubled, which suggests everyday people are more skeptical of this recovery than the desks are. That’s not what a euphoric market looks like.

Either the analysts are seeing something the crowd isn’t, or they’re doing what analysts do, which is follow the price and then explain it. Four weeks ago the price was above $4,600 and they were 73% bullish. At $4,377 they’re 100% bullish. Conviction went up as the price went down. I can’t tell you which group is right. Nobody can.

The Bottom Line

A unanimous poll tells you what a room of analysts thinks. It doesn’t tell you where gold goes on Monday. If you buy physical on a schedule, the number that matters is what you pay per ounce over premium, not whether 16 people agree with each other.

Gold is about 5% cheaper than it was when this poll was merely lopsided. Your monthly buy gets a little more metal for the same money. Watch the Fed’s next move and the oil chart, because those, not the poll, are what moved gold this week.