• 526 days Will The ECB Continue To Hike Rates?
  • 526 days Forbes: Aramco Remains Largest Company In The Middle East
  • 528 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 928 days Could Crypto Overtake Traditional Investment?
  • 933 days Americans Still Quitting Jobs At Record Pace
  • 935 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 938 days Is The Dollar Too Strong?
  • 938 days Big Tech Disappoints Investors on Earnings Calls
  • 939 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 941 days China Is Quietly Trying To Distance Itself From Russia
  • 941 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 945 days Crypto Investors Won Big In 2021
  • 945 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 946 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 948 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 949 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 952 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 953 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 953 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 955 days Are NFTs About To Take Over Gaming?
Ian Campbell

Ian Campbell

Through his www.BusinessTransitionSimplified.com website and his Business Transition & Valuation Review newsletter Ian R. Campbell shares his perspectives on business transition, business valuation and world…

Contact Author

  1. Home
  2. Markets
  3. Other

Gold - The Safest Haven?

I recently read 'Is the U.S. Dollar Losing Its Safe-Haven Status' - reading time 2 minutes - thinking time much longer. This article has caused me to re-visit my constant self-debate as to whether physical gold is the best available 'safe-haven'.

While the article is short, it quotes directly from a research note from the Bank Credit Analyst ('BCA' - a well-regarded research house). According to the above article, the note says:

  • "Since the bursting of the tech bubble in early 2000, the dollar has been inversely correlated with risky assets. However, the recent weakness in the dollar is at odds with the historical relationship"; and,

  • that in times of financial stress three important reasons the U.S.$ strengthens are (1) global capital 'flocks' to the safety of U.S. treasuries, (2) U.S. investors stop sending savings abroad, and repatriate capital, and (3) the U.S. trade deficit narrows during recession.

The article further reports the BCA as saying "This time around, however, the safe-haven factors have not turned in favor of the dollar thus far, even though it is premature to make definitive conclusions due to data lags. U.S. macro policies are the obvious reasons for the dollar's diminishing role as a refuge: fiscal policy is a mess and the Fed is committed to devaluing the dollar".

So where does that leave me on the U.S.$ and physical gold?

I have believed for some time that to suggest U.S. Treasuries are other than - at best - a very short term 'safe haven' makes no sense, if it can be said ever to make sense in the current economic environment. That the U.S.$ is a 'safe haven' is, of course, a common mantra of many financial markets advisors, conventional media writers and commentators, and Internet writers and commentators.

As for physical gold, I have believed for some time that physical gold is the best save haven against both fiat currency erosion (read in particular U.S.$ erosion), inflation, and deflation. This where 'safe haven' is defined not to be referenced to gold's price at a point in time, but rather is referenced to gold's purchasing power over time. Until I convince myself otherwise, or someone else convinces me, I continue to think physical gold currently is the best 'safe haven' as I have defined that term.

Something for you to think about, and then reach your own updated conclusions with the help of your investment advisors.

 

Back to homepage

Leave a comment

Leave a comment