Investors navigating artificial intelligence market turbulence have favored U.S. Treasuries, the dollar, the Swiss franc, and the Japanese yen over bullion. Gold has broken below $4,000 an ounce to reach a one-year low, sliding roughly 25% since the U.S. and Israel attacked Iran in late February. Although central banks like Poland and China increased their third-quarter purchases by 42%, broader investor interest has dried up. Down 9% year-to-date, gold ranks as the worst-performing asset among 14 major asset classes monitored by Bank of America.
Key points
Gold is increasingly behaving like a speculative asset with a strengthening positive corr…: Gold is increasingly behaving like a speculative asset with a strengthening positive correlation to equity markets.
Heavy oversold signals may fail to trigger a rally if investors dump bullion to cover bro…: Heavy oversold signals may fail to trigger a rally if investors dump bullion to cover broader liquidity demands.
Diminishing expectations for U.S. interest rate hikes have failed to revive general marke…: Diminishing expectations for U.S. interest rate hikes have failed to revive general market demand for bullion.
Sources checked by our analysis pipeline: 1
(Repeats Tuesday's column to additional subscribers without any changes. The opinions expressed here are those of the author, a columnist for Reuters.)
By Jamie McGeever
ORLANDO, Florida, Nov 3 (Reuters) - The AI-fueled turbulence hitting markets in recent weeks has revived demand for many traditional safe-haven assets, with one glaring exception: gold.
Growing concerns about the stability and profitability of the AI boom have knocked the S&P 500 and Nasdaq from record highs, pushing investors to seek protection in classic havens like US Treasuries, the dollar , the Swiss franc, and the Japanese yen. But gold, the oldest safety play of all, has not found a bid.
The yellow metal slid below $4,000 an ounce on Friday, its lowest level in a year, despite a seemingly favorable "risk off" backdrop of falling stock prices, widening credit spreads, lower bond yields and diminishing expectations for US interest-rate hikes.
Even persistent weakness in bitcoin, once termed "digital gold", and last week's $6.3 billion cyberattack at crypto exchange Binance, potentially the world's biggest financial heist, have failed to offer gold any discernible support.
Tech giant Meta concluded a major capital-raising initiative across five separate debt tranches in the United States bond market. The substantial debt issuance provides the parent company of Facebook and Instagram with fresh liquidity to fund its ongoing strategic operations and corporate investments.
Market participants are closely watching equity movements as shares of the software company experience downward pressure during current trading. This downward trajectory impacts investor sentiment surrounding the firm's immediate market performance. Stakeholders are monitoring the situation to determine what factors are driving the equity's current decline.
The Facebook parent company is turning to debt markets to secure substantial long-term capital for its expanding technology operations. These freshly raised corporate funds are directly targeted at backing the massive infrastructure required to power the company's expanding artificial intelligence initiatives. The strategic move allows the tech giant to aggressively fuel its high-priority technological growth.