Momentum is already entrenched in commodities, which had another good week. The most fascinating aspect of the gold price spiking is that individual investors have barely begun to engage, and until the last week or so were selling gold as it kept rising. However, this appears to be beginning to change, which could add significant upward pressure to the gold price via ETF purchases. While retail investors stayed on the sidelines in recent months, Central Banks have been piling in, with Turkey, China & India the largest net-buyers of gold so far in 2024.
If this is nothing more than a breather, before the S&P 500 rises to a new (final?) peak, support may be found at 4700-4800. This would give a healthy correction of about 10% from the 28th March peak, before a run upwards over the Summer.
The latter is one possibility. The other one is that the 28th March high is THE peak.
Of course this is very short-term analysis, but it is nonetheless extremely important for longer term investors.
If this is merely hesitation before a rally to a final high, it gives investors a bit more thinking time - in particular time to assess how the picture for years ahead is fundamentally changing in front of our eyes.
On the other hand, if 28th March was THE top, your thinking time is rapidly running out.
The next few weeks will provide some clarity.
Talking of thinking time, this week I share with you the latest market comment produced for Dennehy Wealth clients, The Pieces Fall Into Place. It runs long, but I think covers some important issues:
- Two Cycles Clashing
- Trying Not To Do Something Stupid
- The Trials Of Transition
- UK And Other Global Opportunities