Reva Gold
speaker
27 appearances
1 recordings
1 series
first heard Oct 2018
last heard Oct 2018
Reva Gold’s voice in public audio — every appearance, attributed to the second.
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Yeah, historically you've seen gold take on this property as a store of value.
And when people are really concerned about stocks, about any kind of risky assets, it tends to rise alongside things like utilities, the Swiss franc and the yen, and some kinds of government bonds as investors really seek stable things that are not necessarily connected or tied to economic growth.
Definitely.
During earlier sell-offs this year, people really started to question the role of gold as a haven.
And a lot of that came because of a stronger dollar, which not only makes gold more expensive to foreign buyers, but it's also competing with gold as a safe haven asset.
And that's coming as a result of expectations for higher U.S.
interest rates that are an additional problem for gold prices because when rates go up, gold struggles to compete with things that offer a yield.
That's right.
It's effectively a leveraged way to bet on gold because a lot of these companies have fixed production costs.
Profitability scales up really rapidly when gold prices move either up or down.
So if gold moves a little bit, you can expect shares of these kinds of stocks to move quite a lot.
Gold has definitely had a terrible year.
And a lot of these mining shares, even with the rally that you've had during the sell off, are still sitting on
double digit percentage decline.
So absolutely, the sense that rates are going up has not only meant a stronger dollar, but again, for something like gold, which is offering you no yield, competing with other instruments during this kind of time when the Fed is moving higher and higher has been really difficult.
That's definitely a possibility.
I mean, I think what's different about this particular sell-off is that in the past, people kind of flocked to the U.S.
earlier in the year in the winter and during the emerging market sell-off in the summer.
All U.S.
assets became a kind of safe haven.
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