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David Fickling

Funds Are Turning Sour on Gold When You’d Least Expect It

Investors who hoarded gold as a hedge against uncertainty in the wake of the Russia’s invasion of Ukraine have seen it whittled away to almost nothing. Something’s got to give. 

It’s a simple beast.

It’s a simple beast.

Photographer: Billy H.C. Kwok

Gold, according to financial markets lore, is a pretty simple beast. 

For all its complexities, at bottom what it likes is a weak dollar, turmoil, and lower interest rates. Falls in the greenback mathematically raise the price of dollar-denominated commodities. Turmoil makes investors head for safe-haven assets, of which gold is by far the most long-standing. Lower rates reduce the appeal of its main competitor as a haven, yield-producing government debt.