What is the Metal Sentiment Index?
The Metal Sentiment Index is a quantitative sentiment indicator for precious metals markets. It synthesizes multiple market signals into a single, easy-to-understand score ranging from 0 (Extreme Fear) to 100 (Extreme Greed).
By tracking seven distinct components—from price momentum to futures positioning—the index provides a comprehensive view of market sentiment that goes beyond simple price action.
Why Use This Index?
Contrarian Signals
Extreme fear or greed readings can signal potential market turning points, helping contrarian investors identify opportunities.
Multi-Factor Analysis
Rather than relying on a single indicator, the index combines seven independent components for a more robust sentiment measure.
Transparent Methodology
All calculations are fully documented and reproducible. No black boxes or proprietary algorithms.
Daily Updates
The index is recalculated daily at 6:00 PM New York time, providing up-to-date sentiment readings.
How to Interpret the Index
Extreme Fear (0-24)
Markets are in panic mode. Historically, extreme fear readings have often preceded significant rallies as sellers become exhausted.
Fear (25-49)
Sentiment is negative but not at panic levels. Investors are cautious and risk-averse.
Neutral (50)
Balanced sentiment with no clear directional bias. Markets are in equilibrium.
Greed (51-75)
Sentiment is positive and investors are becoming more aggressive. Caution may be warranted.
Extreme Greed (76-100)
Markets are euphoric. Historically, extreme greed readings have often preceded corrections as buyers become exhausted.
Important Considerations
Not a Trading Signal
The index measures sentiment, not price direction. It should be used as one input among many in your investment process, not as a standalone trading signal.
Extreme Readings Can Persist
Markets can remain in extreme fear or greed for extended periods. Timing is critical when acting on sentiment extremes.
Historical Context Matters
Compare current readings to historical patterns and consider the broader macroeconomic environment.
Have questions or feedback? We'd love to hear from you.