Every so often, a new piece of research or a high-profile speech emerges, arguing that gold has somehow lost its long-cherished status as a safe haven.
The latest example comes from a paper published in the Global Finance Journal. In this study, the authors present an array of detailed data and analysis, examining gold’s short-term volatility, its occasional positive correlation with equities, and its seemingly inconsistent behaviour during moments of crisis.
Their research is undeniably thorough and well-constructed. However, there is an issue that cannot be overlooked. I believe they are asking the wrong questions, and as a result, their conclusions are fundamentally flawed. This was a point we explored in detail during a recent video, where we dissected the nuances that these types of analyses often miss.
Redefining 'Safe Haven'
At the heart of this debate lies a crucial question: what exactly is a safe haven? If we define it strictly, seeing it as an asset that must always rise precisely at the moment equities fall, then yes, gold does not consistently meet that standard. But this narrow definition says far more about the constraints and short-sightedness of modern finance than it does about gold itself.
The notion that an asset must be judged on a quarterly or even daily basis is a distinctly modern obsession, one that overlooks the broader, deeper purpose some assets serve. Gold has never been just a quarterly hedge. Its role is far more profound and, in many ways, far more subversive.
Gold as Financial Dissent
Throughout history, gold has held a unique position, not merely as a store of value, but as a potent symbol of financial dissent. Across empires, dynasties, and modern states, it has operated as both official currency and quiet opposition. It has stood as a hedge against inflation, a shield against the erosion of purchasing power, and a bulwark against centralised monetary control.
Owning gold is not necessarily a vote for returns in the traditional sense. Rather, it is a vote for independence, independence from monetary experiments, from reckless fiscal policies, and from the shifting sands of fiat currency regimes. In a world increasingly defined by monetary manipulation, that distinction has never been more relevant.
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