Typical wisdom when it comes to gold and exchange traded funds (ETFs) for the metal is that when the markets go down, gold goes up. That’s why for ages, it’s been seen as a safe-haven investment; a place for worried investors to go to safely put their money.

But recent activity has been confounding investors: why is the price of gold declining along with the broader market? While gold managed to gain 2.2% on Friday, it still ended the week down 7.1% and 16.6% this month.

There are several explanations for gold’s defiance of the usual fundamentals, reports Carolyn Cui for the Wall Street Journal. One big one is the firmer dollar, since gold is priced in dollar terms. Also, financial institutions are unwinding their bets on commodities as they lower their leverage and raise capital. India has even shown signs of slow buying as the rupee has depreciated, making gold pricey for jewelry makers.

Down the road, the market is split on gold’s direction. One expert says that gold’s value will be revealed when the dollar stabilizes. A strategist says that market sentiment is tilting down for most other commodities, even if it’s divided over gold.

The World Gold Council says higher volatility should be “put in perspective” and gold remains less volatile.

SPDR Gold Shares (GLD) is down 12.4% year-to-date, and down 20.9% in the last three months.

Gold Exchange Traded Funds (ETFs)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.