Is gold still a safe haven for investors?

We asked Seeking Alpha analysts Anna Sokolidou and Power Hedge for their thoughts.

Anna Sokolidou: Gold is still a safe haven asset class that also protects your savings from inflation. However, in the short term it depreciates when all asset classes depreciate, while the US dollar rises. In the longer term, as central banks start easing, it surges in value. Unlike fiat currencies, gold is a highly reliable store of value.

Power Hedge: Gold has worked as a store of value for thousands of years. That is not going to change just because of a few days of bad performance in the domestic market. One of the biggest factors that has been driving the gold rally over the past few years has been buying from central banks - particularly in Russia, China, and other developing nations in Eastern Europe and the Southern Hemisphere. These central banks are not sensitive to price. They are buying for policy reasons and do not really care what the price of gold does. 

We can see the effects of this central bank buying by watching the price of gold overnight. As I write this at 7:40 a.m. EST on April 8, the spot price of gold is up 1.84% relative to the close in the American markets last night. It has been like this ever since the tariff-induced market crash started.  

Basically, the price of gold rises overnight due to buying pressure from China, India, Russia and a few other nations, and then the American market pummels it back down with indiscriminate selling. The central bank buying from these nations will not stop, but it is very possible that the American market will stop indiscriminately selling gold and other precious metals. 

Over the long term, gold is still likely to be a safe haven, but this has not rendered it immune to the widespread sell-off in the panic-driven American markets.

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