How safe havens stack up as tech, energy and France fears grip markets
GLD•Demand for safe havens is strong as technology jitters, the Iran war and concerns about government debt unsettle markets, but traditional havens have been volatile. The dollar is up 4% since late February, the Swiss franc has gained more than 2% against the euro this month, and gold is trading around $4,175 after reaching $5,595 in January.
1. Dollar and Swiss franc
The dollar has risen 4% since the Iran war started in late February, supported by a strong economy, higher rates and the United States’ energy-exporter status. Strategists also point to its vulnerability to technology-stock selling and unresolved concerns about US debt and policy uncertainty. The Swiss franc is up more than 2% against the euro this month, with concerns about French public finances and election uncertainty in France and Spain supporting demand.
2. Bonds draw selective demand
German Bunds have stood out among major economies: when US and French 10-year yields hit 24-year peaks earlier this month, German yields fell as prices rose. Investors said short-dated government bonds may offer shelter from debt concerns, while high debt loads weigh on longer-dated bonds.
3. Gold remains supported
Gold reached a record $5,595 per troy ounce in January, fell after the Iran war began as investors sold assets to cover losses elsewhere, and later rallied as inflation fears returned. It is trading around $4,175, with central-bank buying and safe-haven demand supporting prices above $4,000, analysts said.
