Is Gold Returning as a Safe Haven Asset?


Gold had fallen out of favor for many investors since war broke out in Ukraine.

Spot prices for gold ran as high as $2,066 in March 2022 before plummeting over 20% down to $1,630 in October of the same year.

Many investors switched to other assets like cryptocurrencies in search of better yields.

Then came the seemingly overnight collapse of the FTX crypto exchange on November 2, 2022, sending its CEO, Sam Bankman-Fried to jail awaiting trial. It’s estimated that more than $8 Billion of customer’s assets vanished in the collapse of FTX.

Gold prices ran up from $1,630 to $1,945 in the months to follow before a pullback in February.

Next came the epic Silicon Valley Bank collapse which is still roiling the financial markets. Bank stocks are getting hammered as investors try to weigh the levels of contagion surrounding the SVB debacle. It doesn’t help that Signature Bank also went under and Credit Suisse appears to be on the ropes.

On the heels of the SVB and Signature collapse, Spot Gold prices shot up from $1,818 to $1,931 within one week.

Is Gold Still Regarded a Safe Haven?

Yes, gold is still widely regarded as a safe haven asset by many investors and financial experts. A safe haven asset is an investment that is expected to retain or increase its value during times of market turmoil or economic uncertainty.

Gold has historically been viewed as a safe haven asset because it is a tangible and scarce commodity that can be easily traded and stored. During times of economic uncertainty or market volatility, investors often turn to gold as a way to diversify their portfolios and protect themselves against potential losses.

Additionally, gold has a long-standing reputation as a store of value and has been used as a currency and a means of exchange for centuries. It is also considered to be a hedge against inflation, as its price tends to rise when inflation is high.

However, it’s worth noting that while gold has historically performed well during times of market turmoil, its performance can be volatile in the short term and is subject to a wide range of economic and geopolitical factors. As with any investment, it’s important to conduct thorough research and consult with a financial advisor before making any investment decisions.

What are the Top 5 Gold ETFs?

Here are the top 5 gold ETFs based on their assets under management (AUM) as of March 2023:

  1. SPDR Gold Shares (GLD): This is the largest and most widely traded gold ETF, with AUM of over $50 billion. It seeks to track the price of gold bullion and is backed by physical gold held in a secure vault.
  2. iShares Gold Trust (IAU): This is the second-largest gold ETF, with AUM of over $25 billion. It also seeks to track the price of gold bullion and is backed by physical gold held in a secure vault.
  3. Aberdeen Standard Physical Gold Shares ETF (SGOL): This is another popular gold ETF, with AUM of over $5 billion. It seeks to track the price of gold bullion and is also backed by physical gold held in a secure vault.
  4. Invesco DB Gold Fund (DGL): This is a commodity ETF that seeks to track the performance of gold futures contracts. It has AUM of over $2 billion and provides exposure to the price of gold through a futures-based strategy.
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