Lance: "As long-time readers know, a one-day decline of over 1 percent in GLD’s holdings is what I call my “GLD Puke Indicator,” and it flashed another “buy signal” again today, indicating that we are within + or – a day or two of an important low in the gold price.

As you can see from the chart, this indicator is nearly foolproof when it comes to marking important lows in the gold price. Now, recall that we can sometimes see “clusters” of these signals around major lows in gold rather than just a single signal, but we haven’t seen such a cluster since back in 2008 during that epic panic.

There has also been one false signal back in early December of 2009, which came just a few days off a peak, but there has never been a false signal that has occurred months after a gold price peak has been put in like this one is and definitely not with MarketVane’s bullish consensus below 75 (and especially not at 58 like it is now).

In fact, the closest analogy we have to the current low in the gold price was the 60% MarketVane reading back on July 20, 2010, which came 8 days before the July 28, 2010 “GLD puke indicator” signal, during which period the HGNSI hung around 9%, vs. the current 0.3%.

You will recall that this low in gold that was marked by the intersection of these indicators in July of 2010 just below $1200 was also THE low for the gold price ahead of the Fed announcing the launch of QE2 in November of 2010.