Gold Fails Safe Haven Test as Prices Plunge Amid War and Uncertainty

Gold prices are falling sharply, with precious metal dumping 8% so far this week and behaving more like Bitcoin than a stable store of value in times of economic uncertainty. The metal is now down 15% from its late January all-time high of $5,500 per ounce, slumping to a ten-week low of $4,550 on Wednesday, according to GoldPrice.

Key takeaways

Quick scan — what you need to know:

• Gold prices are falling sharply, with precious metal dumping 8% so far this week and behaving more like Bitcoin than a stable store of value in times of economic uncertainty.
• The metal is now down 15% from its late January all-time high of $5,500 per ounce, slumping to a ten-week low of $4,550 on Wednesday, according to GoldPrice.
• “Gold was supposed to hedge the Iran war – instead it traded like everything else: down,” wrote Bloomberg analysts on Tuesday.
• Gold Little Correlated With Stocks The big move is something that is expected in volatile crypto markets, not stable gold.

Background

What led here, in plain terms:

• “It’s a harsh but necessary reminder that the metal is little correlated with stocks and can behave just like another risk asset when liquidity tightens.” Bloomberg ETF analyst Eric Balchunas…
• “Both unpredictable but valid asset classes, and shouldn’t be judged based on short time frames.” Wrote today about how investors just got a big-time reminder that gold has *zero* correlation to…
• Big difference.
• Good diversifier but unreliable hedge.

Why it matters

Why readers and decision-makers should care:

• Spot Bitcoin prices are holding around $70,000 at the moment and remain in a sideways channel that began in early February.
• However, it does seem to be making higher highs and higher lows, which could be considered bullish.
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