Volatility index hints at upcoming correction

21 Feb, 2024
As at 9am, AEDT.

Gold Spot Price $AU3094

Silver Spot Price $AU35.24

Platinum Spot Price $AU1401

The VIX (Volatility Index) is hinting that all is not well, and a correction may well be on the cards in the near future. Since Dec 1st, the VIX has risen to 15.5 (up 12.7%, comparatively the SP500 has risen 8.9%. The last time we saw the VIX jump similarly it triggered (or reacted to) a correction in 2018. With many traders calling the VIX a ‘fear gauge’, it generally corresponds with investment risk appetite. As VIX increases, generally we see Gold (and Silver) volume grow in ‘risk off’ investment.

And the world’s AI darling Nvidia may well have lost a little of its lustre, losing over $78 Billion in valuation yesterday. If anyone was looking for any insight into when the AI bubble may burst… look no further. With so much pressure on AI-based companies to hold the share market together, it will only take downward pressure on this specific industry to see a massive overall decline in the SP500.

Gold has recovered strongly from its dip below $US2000 last week, now comfortably priced at $US2024.

As companies continue to report earnings and provide weaker than expected results, we expect to see continued volume and pricing improvement for precious metals.

Enjoy today’s charts.

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

US500, with 200MDA

ASX200, with 200MDA