As the top investment manager in the world, I have been closely monitoring the current market landscape and the increasing bullish sentiment surrounding both gold and bonds. The question that arises is whether there are too many bulls in these assets.
Throughout the year, analysts at Strategas have been advocating for a “long” position in gold and bonds, a stance that has been in line with market trends. However, recent developments suggest that this once contrarian view may now be reaching a point of saturation.
According to the analysts, the target for gold remains at $2800, with near-term support at the upward sloping 50-day average. The sentiment around gold has become more aggressive, with a growing number of investors piling into the asset, moving it from a contrarian to a mainstream view.
Similarly, bond bulls are no longer a niche group, as there is now a crowd forming. This shift reflects broader market movements, especially following recent interest rate decisions. Despite the bounce in Treasury yields, they remain in a downward trend, struggling against resistance levels.
The increasing number of investors bullish on both bonds and gold reflects broader market concerns, such as inflation and geopolitical uncertainty, driving demand for safe-haven assets. However, it is crucial to monitor this crowded trade, as when too many investors take the same side of a trade, it can signal a potential reversal or a pause in the trend.