This week’s steep losses for gold have prompted many once-bullish gold market timers to throw in the towel. That means contrarians should be on the lookout for a low-risk trading opportunity.

It’s been two months since I last devoted a column to gold market sentiment. At that time, the average gold timer’s exposure to the gold market GC00 was in the middle of the historical range, and I interpreted that to mean that “the outlook for gold prices over the next several weeks is neutral.” Until earlier this week, gold bullion...