Gold as a safe haven of value in times of global crises

josevas217 (80)modin Project HOPE • 2 years ago

Hello Project Hope friends, I wish you all a great week. As you all know by now, a new war has broken out in Arab countries, unfortunately. But I am not here to talk about the war, no, I think we all should know about it, but I would like to talk about the effect that these events have on the market in general with a clear example using the gold.

To better understand this publication you have to put yourself in the role of an investor and think what would we do if we were people with a large capital, let's say we have 1 billion dollars to invest, where would we take our money as an investment?*, where would we feel safe? would this be a good time to hold investments in the stock market?

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Just yesterday, when the Asian market opened, which is the first one to open, I noticed something interesting in the price of gold, whose price had been falling for a few weeks until it reached 1810 dollars last week, but just at the opening yesterday in less than 5 minutes it went from 1830 dollars to 1853 dollars, quickly.

And there is logic to this price action, don't you think?. If there is one thing that shows strength from centuries ago, it is Gold, the true safe haven of value for most. This means that once people can back their money in something that is strong and considered safe they will do so. We know well that wars create instability in the markets and make many prices go down, of course, we do not see this in the shares of arms companies, but in a large part of the market if it usually happens that prices go down.

_{My tradingview account}

As you can see in the chart above, gold went up, and we could say that it is an action of the big financial institutions to take care of their money and wait for a possible drop in the price of industrial shares, to buy when they go down. Or at least that would be what I would do.

But the market is unpredictable, it is not possible to have a certainty of what will happen, however, I think that the trend of gold has always been bullish, even if it has some setbacks in its prices, which is perfectly normal in any asset, the reality is that for centuries it has only been rising in price, being something highly valued by all.

I assume that for this reason many of the countries of great weight in the global economy are buying tons of gold and keeping it. We can only wait and see what will happen with all this conflict and how it continues to affect the markets.