Gold price increases tied to higher uncertainty

Gold is considered a safe asset because it has the safe asset statistical qualities of being negatively correlated with risk assets during a market downturn. While this is generally true, it is not always the case. We know that gold has some of the characteristics of a safe asset because it will do better when there is high uncertainty. A simple examination tested more formally in academic research finds a positive link between gold, volatility, and uncertainty. From volatility, there is a change in asset demand. More risk with risky assets will lead to higher demand for safe assets.