After gold had fallen nearly $45 on Friday morning something that we haven't seen in a while happened. Gold gradually began to rise, eventually ending the week back above $1220 in a sign that the gold market may have reached a point of selling exhaustion. A higher low in price that coincides with a new low in sentiment is one of the key hallmarks of a sustainable bottom in any market - we may have just witnessed such a phenomenon in gold as evidenced by the following charts:

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Gold CoT positioning as of July 2nd, 2013

Gold_CoT_7.8.2013

Gold_CoT_chart_7.8.2013

Fast money traders have never been so bearish on gold while big money commercials have never been so bullish on gold. Meanwhile, public opinion on gold is one of disgust and despondence:

Hulbert_gold_sentiment

As more and more big name investors come out of the woodwork to make bearish calls on gold (see Jim Rogers yesterday)  it has gotten to the point where virtually any positive catalyst will be enough to ignite a $100-$200 rally. We may look back on July 2013 as being the exact polar opposite of gold market conditions nearly 2 years ago when gold reached $1923.70/oz on August 23rd, 2011. As it turned out, August 2011 was an ideal time to be a seller of gold - will July 2013 turn out to be a monumental buying opportunity?

"The safest and most profitable thing is to buy something when no one likes it. Given time, it’s popularity, and thus it’s price, can only go one way: up." - Howard Marks