Gold breaks below $4,000 amid risk aversion... “Are safe havens a thing of the past (?)”

[Financial News]

Gold prices fell below $4,000 an ounce on the 23rd (local time), the first time since July. The weekly decline was the biggest in four months.
With international oil prices surging and inflation concerns mounting, expectations that the U.S. Federal Reserve (Fed) would raise interest rates again triggered a sell-off in gold. Gold pays no interest, making it less attractive when rates rise. This also suggests that gold is no longer a safe-haven asset.
According to the Financial Times (FT), gold prices plunged to $3,986.50 an ounce that day. After tumbling 2.8% the previous day, they were down 3.3% for the week.
Berenberg said in an analysis note that gold’s decline amid risk aversion was a highly unusual move in the opposite direction.
Gold is regarded as a last line of defense and a safety net whose value holds up against market volatility.
However, investors are flocking to U.S. Treasuries and other safe-haven assets amid concerns that investment in artificial intelligence (AI) may be excessive, while gold remains under selling pressure.
Berenberg believes this is because gold was used as a speculative asset among brokers last year. Speculative money poured into gold, pushing its price above $5,400 an ounce in January this year, but gold prices plunged by more than 20% as those speculative investors pulled out.
Berenberg noted that this was the first time gold had fallen so sharply since December 2008, during the financial crisis. It also expected a close below $4,000 to trigger further selling of gold exchange-traded funds (ETFs), adding to downward pressure on prices.

[email protected] Song Kyung-jae Reporter