Every day someone asks me if, in 2016, gold is still a sound investment, particularly for retirement. Often this question follows news of a price adjustment in the precious metal. But price on any given day can’t tell you the whole story. For example, the gold sentiment index is currently hitting a five-year high, bringing us the strongest demand for it since 2011.

Understanding Market Sentiment

While price indexes measure the current value of a particular market or commodity, sentiment represents investors’ attitude towards it. As such, it can be a good indicator of what prices are going to do in the near future.

To some degree, market sentiment is determined by price. Bearish sentiment indicates prices will be headed down, while when things are bullish they’re going up. However, there are other factors in play besides just the spot price.

According to the Gold Investor Index, in the wake of last month’s election, even as prices were going down, there was a significant rise in private investors either buying gold for the first time or adding to their current holdings. In October, the index was at 56.8; by the next month it had risen to 59.3.

What does this mean? An index of 50 indicates a perfect balance of certain investors buying gold and others selling. The higher the number rises above 50, the more investors are buying. Increased interest from a greater number of buyers translates to higher market sentiment.

Looming Financial Uncertainty

Many financial experts are cautious of what the stock market will do over the next year. Whether you’re a supporter or not, it’s indisputable that Donald Trump’s victory represents change, hence uncertainty, for the economy. Additionally, as Brexit goes into effect, it will almost certainly have negative repercussions for our economy. Finally, there’s the fact that, in spite of these tumultuous financial times, the Fed raised the interest rate this week—putting even greater strain on our economy going forward.

In times like these, smart investors know how important it is to hedge their bets and protect their investments from sudden losses. This is one of the reasons gold historically goes up in value as markets decline.

Safe Havens

As a physical commodity, gold tends to be more stable than other investments such as stocks. Its buying power remains constant even as prices fluctuate. That’s what makes it a safe haven. If the stocks you invested in suddenly go down, causing you to lose money, you still have your gold investment to keep you from being wiped out. This is likely one of the reasons why gold sentiment is going up so much, and so quickly.

Another contributing factor is that, as economic uncertainty looms, gold is getting cheaper. Not only that, but, due to mispricing and other factors, it may be about to shoot up in value significantly in the near future. For a lot of investors, that means there’s never been a better time to buy. All of these factors may come together to form a perfect storm of gold sentiment, ultimately driving the price up as people increasingly retreat from more vulnerable investments.

It also serves as a timely reminder for Americans forty and above that we’re running out of the time we would need to recover from severe market downturns. If our market-tied IRAs and 401(k)s take a significant hit in the next year, how long will it be before we even get back to where we started, much less re-coup gains we’ve missed out on? This is the reason a Gold IRA is the best of both worlds; you get to choose your level of market exposure, while securing whatever percentage of your wealth you choose in physical gold.

Market sentiment can tell you a lot about both what the economy is doing now, and what it’s likely to do in the foreseeable future. While there’s no sure way to predict what markets will do, looking at sentiment index numbers in light of current events can give you a good idea. Judging by current market sentiment, gold is in for a good year in 2017.

Trevor Gerszt is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau.