Gold- safe haven

Gold- safe haven

Subject: Economy

Section: External sector

Context: Gold prices rising

Concept :

A safe haven is a type of investment that is expected to retain or increase in value during times of market turbulence. Investors seek out safe havens in order to limit their exposure to losses in the event of market downturns.

For years, gold has been considered a store of value.

• As a physical commodity, it cannot be printed like money-limited supply
• Its value is not impacted by interest rate decisions made by a government.
• Less volatile-Because gold has historically maintained its value over time, it serves as a form of insurance against adverse economic events.
• Also, when there is a threat of inflation, the value of gold increases since it is priced in U.S. dollars. However inflation is negatively correlated with stocks and bonds hence, serve as safe havens for investors.
• General acceptability among public