Global Markets Gold FOMO: Why Are Investors Heading Towards It?

Record Rally in Global Gold Markets

Global gold prices have surged with a rally not seen since the 1970s. Investors, driven by inflation concerns and high yields, are flocking to precious metals like gold due to a sense of 'FOMO' (Fear of Missing Out). In a market where selling pressure has emerged, gold prices have increased by more than 50% this year, reaching $3,940.

Trade Wars and Safe Haven

The trade wars initiated by former U.S. President Donald Trump have encouraged investors to turn to safe-haven assets. The depreciation of the dollar has made gold purchases more attractive. Although market volatility stemming from tariffs decreased in the summer months, the increase in gold prices did not slow down. In September, gold achieved approximately a 12% increase, marking the largest monthly rise seen since 2011.

High Demand for Gold ETFs

Another notable trend in gold investment is the strong influx into exchange-traded funds (ETFs). Nicky Shiels, an analyst at MKS Pamp, stated that the markets have gone wild, and this is directly related to the $13.6 billion net inflow into ETFs. The total amount of gold in gold-backed ETFs has risen above 3,800 tons, approaching the peak seen during the COVID-19 pandemic.

Changing Investment Strategies

Morgan Stanley is recommending investors to adopt a new distribution of 60% stocks and 40% bonds along with a gold-weighted strategy of 60% / 20% / 20%. This new strategy could open the door for trillions of dollars in assets to be directed towards gold. As a result, fund managers are transitioning into a new era by allocating an average of 2% of their portfolios to gold.

Preference for Gold Over Dollar and the Future

Market uncertainty is leading investors to take positions against the dollar while simultaneously directing them to purchase gold. Valérie Noël, trading director at Syz Group, indicates that some clients have adopted this dual strategy. Gold, in the past... ```