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Going through various press reports and per conventional economic wisdom, when the head winds of economic and financial uncertainty blow dangerously strong, GOLD is the number one “safe haven” investment. If we take this assumption to its logical conclusion, Gold and Silver prices should been moving contrary to those of stocks and the dollar.
Here is the list of recent news items speak volumes:
“Gold eases as the dollar ticks up. Gold moves in the opposite direction to the U.S. currency as it is seen as an alternative asset.” (Reuters)
“Fears over the world’s economy sparked safe haven buying in gold while falling equity markets prompted a rush of investments into less risky assets such as bullion.” (Forbes)
“Gold climbs on weaker equities… Given the global political tensions added to the banking crisis, gold remains a superb insurance policy.” (AP)
Conclusion : Basing your investment on the assumtion that Gold returns are “Safe-haven” is a riskier decisions you can make.
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