Gold was the first safe-haven to come under pressure during this period of severe market stress. Analysts at HSBC consider why the yellow metal was the first to wobble.
“We believe this is likely due to the severity of stock market declines and the need for investors to liquidate positions and meet margin calls on risky assets.”
“The performance of gold is reminiscent of its behaviour during the Global Financial Crisis when markets were severely stressed also.”
“Given the severity of the market turmoil and the sharp decline in equities, the likes of which we haven’t seen in decades, it seems that gold has temporarily lost a little of its shine.”
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