Gold bugs like to pretend they are the smartest guys in the room. But they are just as clueless as the rest of us.
Gold is just another risk asset, not a magical hedge against Armageddon.
The U.S dollar and other hard currencies are the only true safe havens in a time of global pandemic.
Gold bugs are losing their minds as precious metals continue to sell off with the rest of the market amid the global coronavirus pandemic. April Comex gold is trading at just under $1,500; silver futures are hovering at just $12, the lowest since 2009.
To be fair, precious metals haven’t cratered as badly as stocks have. But this is hardly an example of the ‘massive’ safe-haven demand that gold vendors extol when they hawk useless hunks of metal to gullible retail investors.
Gold is just another risky commodity that will move up or down based on market forces.
Cash is the safest asset in times of global catastrophe because it gives investors liquidity and the ability to buy discounted stocks for cheap after the dust settles.
Is This the ‘Zombie Apocalypse’ Scenario?
The coronavirus pandemic has sent the world closer to a “zombie apocalypse” scenario than anything in recent memory. Over, 212,000 people have been infected with a new and deadly disease. Over 8,000 have already died and hospitals are overflowing in the hardest-hit areas.
Governments are restricting travel, and stock markets are collapsing at an unprecedented speed.
The coronavirus pandemic is the ultimate test of gold’s role as a ‘safe haven,’ and so far it has failed miserably. Despite rising in tandem with the wider market in 2019 and early in 2020, the yellow metal has participated in the recent asset selloff.