In August of last year, MKS Finance launched GASI, a new market index. While a number of banks in the foreign exchange markets compile indexes measuring market sentiment by a consensus reading, such indexes have not been generally available in gold. Until now.

Our idea was to differentiate this index from typical bullish consensus readings -a tool typically used by many contrarian traders. To accomplish that, we decided to gather a consensus of opinions from gold analysts around the world - people with a general objective view of the market - rather than take views from customers and dealers, who might tend to have more subjective views.

Thanks to the great and kind co-operation of a number of prominent analysts, thereby giving a good presentation of trading centres around the world, we have been able to put together what we believe is a useful tool for traders looking to gauge the sentiment of market insiders.

The Gold Analysts Sentiment Index (GASI) is essentially an average derived from figures contributed by 17 gold analysts from a number of the world's leading bullion banks and investment houses as an indication of their price expectations for gold for the week ahead. Every Monday morning the gold analysts express their sentiment for the direction of the gold price through a level from 0 to 10. A reading of 0 indicates an extremely negative assessment; a reading of 10, an extremely positive outlook.

As the survey is relatively new, we are not yet sure whether the index is more useful as a contrarian tool or if in fact there is a more positive correlation. Early indications suggest that, so far, the GASI numbers have a positive correlation to the gold price (see Figure 1).

The response so far from market participants has been very positive, and we would Like to thank all the contributors to the survey for their assistance in compiling the numbers.

Frederick Panizzutti began his career in the Treasury division of Sandoz. After leaving Sandoz, he worked at Union Bank of Switzerland in foreign exchange and equities. Three years ago, he joined MKS Finance Geneva three years ago as a vice president where he is responsible for research and strategy on a variety of markets, concentrating on gold and other precious metals. Enquires about GASI may be directed to him by e-mail at