The Wall Street Journal – Gold Investors Rush for the Exits
Gold’s status as a safe haven is looking shaky. Investors often have rushed to gold during flare-ups in the European crisis. But as they weigh Greece’s future in the euro zone and fret about Spain’s credit-market woes, fewer investors are seeking out the precious metal…Bullion hasn’t been in negative territory this late in the year since 2008, when investors were liquidating assets and scrambling for refuge. Instead, investors are finding more comfort in U.S. Treasurys and German bonds. “They’re trumping gold as a safe haven,” said James Steel, a gold analyst at HSBC. The problem for gold is that demand for Treasurys is leading to a rising U.S. dollar. That hits gold, which is priced in dollars, by making it more expensive for buyers who hold other currencies.
Source: Bianco Research