Is the “Super FOMO Rally” for Gold Coming to an End?
News Summary
This week, financial markets have been particularly interesting, with Gold's "Super FOMO rally" persisting, driving prices above $4300. This two-month uninterrupted ascent is a multi-year record. As retail sector "fear of missing out" intensifies, indicating queues for physical gold globally, the rally's peak might be nearing, though predicting exact reversal points remains difficult. Last Friday, US President Donald Trump's softened rhetoric led to a stock market rebound, with the S&P 500 experiencing its best day since August. Concurrently, gold and other metals corrected from their peaks, offering some relief to the "Super FOMO rally." The ongoing US government shutdown continues to delay important economic publications, such as the US inflation data initially scheduled for October 15th, now expected on October 24th. This week, traders will monitor speeches from several FED members, the rescheduled US inflation report, and Wednesday's crude oil stocks change. The article also highlights specific trading opportunities, including JPMorgan stock (testing dynamic support for a potential rebound) and USD/CAD (poised for an upswing due to a stronger US dollar and weaker crude oil futures).
Background
This article is published in October 2025, against a backdrop where Donald J. Trump is the incumbent US President, re-elected in November 2024. At this time, the US government is experiencing an ongoing shutdown, which has led to delays in the release of crucial economic data, such as inflation reports, thereby exacerbating market uncertainty. Amidst this environment, the gold market has witnessed an unprecedented "Super FOMO rally," with prices surging above $4300, reflecting potentially diminished investor confidence in traditional assets and heightened concerns over inflation or geopolitical risks. Concurrently, US stock indices like the S&P 500 have been trading within a defined range, illustrating market apprehension amidst the uncertainty.
In-Depth AI Insights
What are the deeper underlying drivers of Gold's "Super FOMO Rally" beyond retail sentiment? - While retail "fear of missing out" is cited, Gold's surge above $4300 and two-month uninterrupted rally suggest more than just speculative retail interest. It likely reflects profound underlying concerns about the global economic outlook, major economies' monetary policies, or geopolitical stability. - The ongoing US government shutdown and delayed inflation data create significant macroeconomic uncertainty, driving investors towards safe-haven assets. This indicates market expectations of persistent inflationary pressures or a lack of confidence in governmental capacity to manage economic crises. - Policy uncertainties emanating from the Donald Trump administration, particularly potential hawkish stances on trade and fiscal policy, could also be fueling this risk aversion and boosting gold demand. How does President Trump's "softened rhetoric" impact market dynamics, and what does it signal? - Trump's softened rhetoric immediately boosted stocks and triggered a gold correction, indicating extreme market sensitivity to his pronouncements. Markets interpret this as a short-term improvement in risk sentiment, potentially signaling a temporary de-escalation of trade tensions or a softening of domestic policy stances. - This shift in rhetoric could be tactical, aimed at stabilizing market sentiment, especially ahead of key economic data releases or Fed official speeches. It might be a strategy to prevent excessive panic amidst the ongoing government shutdown and delayed inflation figures. - Investors should be cautious whether this "softening" represents a sustainable policy pivot or merely a cyclical market intervention. If underlying issues like the government shutdown or inflationary pressures remain unresolved, market sentiment could quickly reverse. What are the broader implications of the ongoing US government shutdown for the Q4 2025 economic outlook and asset allocation? - A prolonged government shutdown not only delays critical economic data but also actively impedes economic activity, impacting consumer and business confidence. This could lead to downward revisions in Q4 GDP growth forecasts and heighten the risk of an economic slowdown. - Delayed economic data complicates the Federal Reserve's monetary policy decision-making, potentially reducing transparency and effectiveness. This increases uncertainty regarding the interest rate path, creating ripple effects across bond, equity, and foreign exchange markets. - In terms of asset allocation, investors may need to shift further towards defensive assets. Continued uncertainty will likely sustain demand for safe havens like gold, while potentially pressuring cyclical stocks and higher-risk assets. The potential volatility in the financial sector, as seen with JPMorgan, necessitates a granular assessment of individual equities.