Q.DOESN’T GOLD RALLY DURING ECONOMIC TURMOIL?
A.Not always. Investors often flee from all their positions, and in this case have largely turned to the US dollar as the most liquid option.
Q.BUT WHY HAS IT BEEN HIT SO HARD?
A.There are several possible factors, with gold likely being affected by a combination. Losses on equities has seen some profit-taking on the metal. The Chicago exchange (CME) has hiked its margin requirements.
Q.SO IS IT GAME OVER FOR THE GOLD RALLY?
A.Not at all. Uber-loose monetary policy appears to be here to stay, while economic uncertainty still makes it more attractive than most alternative investments.