Gold has been on a tear as the dollar is under pressure, raising questions about global confidence and market risk. The US economy and markets are unmatched in size. The dollar is the king of currencies, and US treasuries are often considered a safe-haven asset. But, investors appear to be reassessing that. This has weighed down on the greenback and cooled the stock markets.
"London's FTSE 100 has scaled fresh heights as its defensive qualities shine once again in an uncertain world. "Investors are grappling with the fallout from a tech sell-off and are assessing deteriorating relations between the US and Iran. The Footsie hit fresh record levels in early trade, as investors sought solace in its constituents with mining, utilities and energy stocks making gains.
The two precious metals, the most classic of the "safe-haven" assets, have the tangibility and inherent scarcity to act a hedge in moments of turmoil, particularly when investors worry that politics or policy could undermine the value of the dollar or U.S. government bonds. That is why the metals' relentless rally to record highs since late last year-Gold is up 84% year-over-year and silver up a whopping 245% - has drawn attention from analysts.
