Gold as a safe haven? Not this year

Gold has not been a safer haven even though there have been a number of risks which would suggest that global investor should hold gold.We have had geopolitical risks, higher inflation in emerging markets, a debt ceiling crisis and the threat of more monetary easing. The response has been falling gold prices, a decline of more than $350/oz or 21% since the beginning of the year.

The reaction of investors has been to pull money out of the market. The amount of gold leaving ETF's has been in the millions of ounces. Low interest rates have not stops this flow. Inflation albeit low has also not stopped this flow. Gold has fallen out of favor with investors.