It appears a shift has begun in how precious metals and related ETFs behave. Gold in particular is now acting like a “risk-off” investment that actually would do well in a deflationary environment. [ETF Correlations Rise]
I say deflationary because the long end of the Treasury curve rallying as much as it has is indicative of continued deflationary pressures over a long period of time.
For gold to behave as correlated to Treasuries as it has may be indicative of a change in the way certain investors view “safe-haven” investments. After all, S&P can’t downgrade a metal like it did the U.S. government.
The author, Pension Partners, LLC, and/or its clients may hold positions in securities mentioned in this article at time of writing. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities.