Flight to Quality?
The gold price has been down, US dollar has been up while the stock markets around the global is tanking. It is a rare moment of fear. Usually the gold price trade oppose to the stock market. The stock market goes up, the gold goes down, vice versa. Not now. It is a state of panic. Investors are fearful, they want cash. Assets abroad are dumped, causing the huge drop in foreign currencies and stock markets aboard. Next is the stock market in US, all the investors, retail or fund are holding their asset in USD, treasury. Not even in gold! But is going to T-Bill a flight to quality? With the size of US debt, it is probably not. The only assurance is that no one in the right mind would let US to default. The world cannot afford to.
It is time to listen to Buffet: Be fearful when others are greedy, and be greedy when others are fearful.
