Good As Gold?

Gold has typically been able to hedge against losses in times of financial crisis, or economic uncertainty, but traders’ views on the metal might be shifting, according to MarketWatch.   “The gold market has thus far been frustratingly unable to summon its historical safe-haven attributes,” said Jon Nadler, an analyst at Kitco Bullion Dealers.    “When you have bullion moving in tandem with equities, you have to scratch your head,” he said. And “the last thing the traditional buyers want from gold is for it not to perform when the going gets tough in paper assets,” he said.   The way gold is bought and sold has expanded, and the diversity has been good and bad, feeling a very volatile trading environment.   Options have increased and “today investors have a wide variety of exchange-traded-funds, hedge funds, mining shares and a myriad of futures and options contracts all the globe,” said Kevin Kerr, editor of Global Resources Trader.   However, “what’s happened is that gold has moved from being a beneficiary of a stock market sell-off to a victim,” he said.   “The apparent quest for liquidity among global investors has made gold a victim to its on recent success,” Nadler said.   But, Amaury Conti, an equity trader at San Antonio, Texas-based Austin, Calvert & Flavin, doesn’t believe the view of gold has changed, it’s the way to trade it that’s different.   “Gold will go up in uncertain times as it usually does, but now the ability for a trader to sell the ETF and go short has changed the liquidity and risk dynamics of the asset,” he said.     The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.