This Is a FOMO Rally: Gold Eyes $3,650

FOMO (Fear of Missing Out) describes the anxiety of missing market opportunities, often leading to irrational investment decisions. Typically associated with bull markets, it reflects human greed, eventually inflating bubbles that trigger market collapses.

At present, similar sentiment is evident across equities, bonds, and even alternative assets. While daily commentary may not be necessary, our role remains to highlight risk.

As of September 3, the AAII bull-bear index reveals retail sentiment skewing increasingly bearish. The percentage of bearish investors jumped from 39.4% to 43.4%, even as indexes hit fresh highs. Current conditions reflect either a “short squeeze” rally or simply sidelined investors capitulating. We believe that once retail investors fully capitulate and turn bullish, the upside momentum will likely pause.

Despite this, we do not recommend chasing longs at these levels. To borrow from the famous line often attributed to Mark Twain and echoed by Wall Street managers before the 2008 crisis: “It‘s not what you don’t know that gets you into trouble. It‘s what you know for sure that just ain’t so.”

Valuations are clearly stretched—this is not ignorance. Take the Nikkei 225, which recently set new highs despite Japans prime minister resigning.

Figure 2: Nikkei Index Surges After PM Resigns (Source: Sina Finance)

Political turmoil is normally an unequivocal bearish factor, yet markets rallied. Some speculate instability could delay BOJ rate hikes, preventing premature tightening. Extending Abenomics-style policy continuity may help Japan avoid another fleeting boom. In such uncertainty, patience is warranted—investors should await clearer forward guidance.

Turning to gold ETFs, the World Gold Councils monthly report showed North American funds added $4.1 billion in August, marking a third consecutive month of inflows.

Three primary drivers underpin demand:

• Trade risks and macro uncertainty,

• Persistent short-dollar positioning,

• Fed Chair Powells dovish Jackson Hole remarks lowering rate expectations.

Still, we view these bullish arguments as somewhat fragile. The dollar short trade is crowded, and as trade balances gradually improve, sustained dollar selling may prove irrational.

On trade risk, most uncertainties appear resolved, with limited new downside catalysts. In a tightening liquidity environment, the real risk lies in dollar appreciation, not inflation.

As for Powell‘s dovish tone, structural labor market issues (long-term unemployment) limit the effectiveness of rate cuts. While easing reduces corporate and household debt burdens, it won’t quickly revive consumption unless inflation expectations ease (e.g., via tariff reductions).

Bottom line: Todays FOMO rally is built on seemingly plausible but flawed assumptions. Investors should resist chasing the herd.

• Gold Technical Outlook



MACD momentum suggests current price action is flattening, signaling easing divergence and leaving room for further upside. However, new highs should not anchor expectations for a trend reversal point. Instead, attention should remain on support levels.

• Supports: $3,600 / $3,578 / $3,523

• Resistance: None significant identified

Strategy: Stay sidelined and await clearer trend confirmation before entering.

⚠️ Risk Disclaimer: The above views, analysis, research, and prices are provided as general market commentary only. They do not represent the position of this platform. All readers assume full responsibility for their own investment decisions.