We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
What's the logic?
donshale
Posts: 44 Forumite
Today stock markets are falling again and gold is down as investors sell heavily.
Market analysts suggest that "fear that neither the U.S. nor Europe are able to tackle their sovereign debt problems drove investors to the dollar."
Can someone explain why, if one of the fears is that the U.S cannot tackle its debt problems, investors would consider the dollar a safe haven?
Is it really a least-worst option? Better than anything else?
Market analysts suggest that "fear that neither the U.S. nor Europe are able to tackle their sovereign debt problems drove investors to the dollar."
Can someone explain why, if one of the fears is that the U.S cannot tackle its debt problems, investors would consider the dollar a safe haven?
Is it really a least-worst option? Better than anything else?
0
Comments
-
Because comodities are traded in USD. To buy them you need to buy the currency in effect.0
-
Does this mean investors are leaving stocks, gold, currencies etc. and moving into commodities?0
-
Precious metals are a commodity.
The reason to sell may be different for different people but essentially they are all predicting a downturn in the economy and therefore in the value of stocks and shares. People may want to sell out before a predicted big drop and the dollar or pound may be a better bet that stocks that fall by a significant amount. A while ago some of these people and others may have bought into gold but it has (in general) been soaring high and I think people are now as bearish about it as they are about other investments in the current economy.
Dont forget all the of the movement downwards is not just because of people selling out per se. There will be a re-jig in valuations for other reasons too.
t0
This discussion has been closed.
Categories
- All Categories
- 346.5K Banking & Borrowing
- 251.3K Reduce Debt & Boost Income
- 451.3K Spending & Discounts
- 238.7K Work, Benefits & Business
- 614.1K Mortgages, Homes & Bills
- 174.7K Life & Family
- 251.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 15.1K Coronavirus Support Boards