Why the tumble in gold prices actually predicts a bullish market

That’s not all. Gold bullion holdings in ETPs have declined 533.3 metric tons this year alone and Societe Generale—one of the biggest banks in France, also referred to as SocGen—expects gold bullion investors to sell another 285 tons this year.

As readers of Profit Confidential know, I am a contrarian. Increased selling and a significant amount of negativity towards gold bullion is actually a bullish indicator to me. The decline is really separating the men from the boys. Remember: buy when there’s blood in the streets.

The prospects for gold remain very strong in spite of the price decline.

At the very core, what gold bullion essentially does is provide safety from uncertainty. The economic troubles we’ve had recently haven’t gone away—in fact, new troubles are emerging.

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