It's fair to ask why havens aren't rallying amid the stock selloff. Gold, for example, is down this week and exchange-traded funds backed by the metal saw heavy selling, with holdings declining the most since July.
One possible reason is that ETF investors might be selling gold to offset their stock market losses.
It's not for the first time gold has struggled during the acute phase of a selloff - the metal also fell during the 2008 crash, probably as investors scurried to cover margin calls. Yet bullion's haven appeal is evident in its outperformance on a relative bases, as it turns higher in later phases while everything else continues to slide.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
Read more:
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not intended for distribution or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Disclaimer:
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 63,41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.