According to the Fear & Greed Index, greed is still the dominant emotion controlling the markets presently. The Fear & Greed Index is a compilation of seven different indicators; market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand. The index tracks how much these individual indicators deviate from their averages to measure whether investors are acting on fear on or greed.
With a stock market continuing to show positive momentum and market volatility remaining relatively neutral, this index indicates a strong disposition toward greed in 2024. And yet, when you look outside the narrow view provided by the index, there is evidence to the contrary.
While safe haven demand appears low compared to the appetite for risk, the index only measures that demand by whether investors are weighted towards stocks over bonds. Yet, we know that safe haven demand over conflict in the Middle East and Europe is driving investors towards other safe haven assets like gold, which has seen an increase of roughly 33% since the start of 2024.
The other factors driving gold high right now are central bank gold buying, election year uncertainties, and the anticipation of further interest rate cuts before year’s end.
Fear isn’t driving the stock markets, but it is definitely a factor in why gold is more attractive now than it has seemed in recent years.
Yet, the biggest fear we’re hearing a lot of lately isn’t measured by any index… it’s the fear of missing out.
It’s not Freddy Kreuger, the monster haunting the dreams of investors is FOMO.
Gold’s positive trajectory in 2024, building in momentum on the modest gains of 13% in 2023, is causing many investors to question if it’s too late for them to enter the market.
Over 30 all-time high record closes in 2024 has investors questioning if these peaks are the ceiling prices, and if gold will go lower from here.
So, if you’re one of those investors who has been anxious about buying gold at all-time highs, we’re here to tell you there’s nothing to be afraid of.
While the current price surge may eventually stabilize, gold’s ascent is years in the making, and most key indicators point towards many more years to come before the ceiling of the current bull market.
What signs should investors look out for to see if gold is still in the stages of a bull market?
- Political Stability
- Gold/Silver Ratio
- Duration
- Gold Price
- U.S. Dollar Strength
- Interest Rates
- Sentiment
You should be afraid of missing out if…
- Geopolitical tensions both globally and domestically are calm.
- The Gold/Silver Ratio has narrowed to 30-50 ounces of silver to buy 1 ounce of gold.
- The bull market has been going on for about 10 years.
- The gold spot price is two to three times the previous bull market’s high
- The U.S. Dollar is growing in strength after an extended period of weakness.
- Interest rates climb to near double digits.
- The general public is desperate to own gold
In the meantime, geopolitical tensions remain high in the Middle East and Europe, and the upcoming U.S. presidential election is a powder keg, regardless of outcome.
The Gold/Silver ratio is still in the upper 70’s to low 80’s.
The current bull market started to emerge around 2016, but didn’t really pick up steam until 2020. Even so, it should still last for another 4-5 years… the best is yet to come!
We know this because the gold spot price still has a way to go… the previous bull market saw a peak of about $1,950… two to three times would put the next peak in the range of $3,900 to $5,800!
While the U.S. Dollar Index is down from it’s 2022 highs, the dollar is still relatively strong compared to the potential lows it will reach as interest rates continue to drop.
And finally, western investors are just starting to wake up to owning gold… in ETF form. The bullion market is still just heating up.
Your fears of missing out are unfounded… as long as you’re ready to act now. Don’t let yourself get spooked into inaction as spot prices continue to climb. Got gold?
If you’re ready to add gold to your portfolio, call 1-800-831-0007 to speak with ASI’s preferred client relation specialists to see the best options in bullion pricing and products today, or buy directly from www.assetstrategies.com
