Not exact matches
They consider a range of arguments for owning gold, such as: (1) gold
hedges inflation; (2) gold
hedges currency decline; (3) gold
is attractive when other assets
are not; (4) gold
is a
safe haven in times of crisis; (5) gold
is a de facto world currency; and, (6) central banks and investors in aggregate
are still underweighting gold.
Is gold a prototypical
hedge (based on average uncorrelated or negatively correlated behavior) and
safe haven (based on uncorrelated or negatively correlated behavior during a market crash)?
It
is used as a
hedge against inflation;
safe -
haven asset in times of wars and political uncertainty; alternate asset class to equities and fixed - income instruments; near - cash; and metal of choice in a number of industries.
Traders and investors
were concerned over the Greek situation and therefore gold
was bought as a
safe haven or
hedge against the financial turmoil that could follow a Greek default.
Gold
is accumulated for a myriad of reasons, including to
hedge volatile stock markets, to offset fluctuating commodities prices, and as a
safe haven against falling home prices.
In summary, gold
is generally a
hedge and
safe haven for stocks in developed markets, but not in emerging markets.
A
safe haven is different from a
hedge, which has zero or negative return correlation with another asset or portfolio on average.
They apply this analysis to definitions of a
hedge (
safe haven) as an asset that
is uncorrelated or negatively correlated with another asset or portfolio on average (in times of market stress or turmoil).
Fears over Greece should increase in the coming days, so then the gold prices, as the yellow metal will
be bought as a
safe haven or a
hedge against the financial turmoil that could follow a Greek default.
Yes, I
was equally keen on Japanese property a couple of years back, but opted for German property in the end as i) I think it also offers a global / European
safe -
haven status (which Japanese property doesn't), and ii) I had no need / inclination to
hedge it (I think currency
hedging a Japanese property position
is essential, even now).
Investments in Gold
are used as a
hedge against inflation and currency devaluation, and as a
safe haven against any economic crises.
Oil would
be the knee - jerk bet to
hedge against an escalation in the region, and sure enough crude prices
are on the rise recently, but the questionable fundamentals in the energy segment could steer capital towards the traditional
safe -
haven of gold and the Yen.