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Bloomberg/Justina Vasquez and Ranjeetha Pakiam/2-28-2020
“With stocks in freefall, investors usually turn to gold as a haven of last resort. On Friday, things got so bad that they had to cash in on the metal to cover losses in other markets, spurring its biggest drop since 2013. Gold has now joined the global asset sell-off as investors unload the metal to cover margin calls.”
USAGOLD note: The selloff in stocks is related to fears of a global virus contagion and an oncoming recession. The selloff in gold is related to speculators greening up to meet margin calls in the stock market. Of the two, which seems to be a temporary phenomenon and which the more permanent? Logic and common sense will ultimately prevail – particularly if the developing sentiment about the economy sticks and central banks move to blunt the first stages of a recession. As it stands on the year thus far, gold is still up 1.2%. Stocks are down 13.1% and silver is down 8.2%. (All three as of 1:31 MST, 2-28-2020)
