On Thursday (Feb. 4th 2010), markets across the world sunk lower as sovereign debt problems spread fear and panic among investors. The graphs below shows how red was the color of the day.
Click on images for full-sized graph
As expected, the safe haven currencies (U.S. dollar and the Japanese Yen) skyrocketed as investors looked for somewhere safe to park their money. On the other hand, Gold failed miserably in acting as a safe-haven as it sunk more than 5%.
Click on images for full-sized graph
Sovereign defaults and potential problems for the fiat Euro currency should have been great catalysts to send Gold flying off the shelf. However, it seems like Gold-related ETF buying and retail investors induced by fear mongering can only bid up prices so much. If you’re in the Gold $1500 camp, the current price of $1,050 should be a gift from Heaven.
I’ll stick with the U.S. dollar as my safe heaven.
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