How does the current gold sentiment (score 40) compare to historical sentiment readings before major moves?

Historical context of sentiment scores

In the sentiment‑index used by Bybit/FxStreet, a reading around 40 is considered neutral‑to‑slightly bullish, reflecting modest optimism but far from the “extremely bullish” levels (≥ 70) that have preceded past breakout rallies. In past major moves—e.g., the 2020 pandemic surge (sentiment ≈ 70‑80), the 2022‑23 inflation‑driven rally (sentiment spiked to ≈ 80‑85), and the early‑2024 post‑Fed‑cut rally (sentiment ≈ 75)—the sentiment gauge surged well above 60 weeks before price broke out of long‑term consolidations. Conversely, before the 2021‑22 dip (sentiment around 30‑35) the market was in a defensive, risk‑off mode that preceded a 15‑20 % downside. Thus a score of 40 places gold in a pre‑breakout “neutral‑low” zone—the market is still on the “wait‑and‑see” side rather than the euphoria that usually precedes a breakout.

Trading implications

Given the neutral‑low reading, gold is likely still in a consolidation phase while the macro‑catalysts (U.S. Treasury‑yield volatility, upcoming Fed policy meeting, and geopolitical risk) are being priced in. Traders should look for a clear trigger—for example, a breach of the key 2‑month high around $2,150‑$2,200 or a decisive break of the $2,100‑$2,120 support‑turn‑up pattern on the 4‑hour chart. If price pierces the $2,150 level with volume, a short‑term bullish run could start, mirroring past breakout patterns when sentiment moved from the 40‑50 range up to 70+. In the meantime, maintain a tight risk‑managed approach: keep a modest long position (e.g., 1‑2 % of capital) at $2,130‑$2,150 with a stop‑loss just below $2,090, or stay in cash until sentiment climbs above 50, which historically has been a more reliable pre‑signal for the next major move.