Sunday , 16 June 2024

Ian Campbell's Commentary: Gold – The Safest Haven?

Is physical gold the best available ‘safe-haven’ or is it the U.S. dollar – or perhaps even U.S. Treasuries? Words: 793

So questions Ian R. Campbell, FCA, FCBV ( in Today’s Economic & Resource Stocks Commentary* which Lorimer Wilson, editor of (Your Key to Making Money!), has further edited ([  ]), abridged (…) and reformatted below  for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included so as to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. 

Campbell goes on to say:

I recently read the article** Is the U.S. Dollar Losing Its Safe-Haven Status by Prieur du Plessis  – reading time 2 minutes, thinking time longer – which has caused me to re-visit my constant self-debate as to whether physical gold is the best available ‘safe-haven’. 

The article is short and quotes from a research  note from the well-regarded research house Bank Credit Analyst  (I haven’t had access to the BCA research note) …which says:

  • Since the bursting of the tech bubble in early 2000, the dollar has been inversely correlated with risky assets.  However, the recent weakness in the dollar is at odds with the historical relationship; and,
  • that in times of financial stress three important reasons the U.S.$ strengthens are:
  1. global capital ‘flocks’ to the safety of U.S. treasuries,
  2. U.S. investors stop sending savings abroad, and repatriate capital, and
  3. the U.S. trade deficit narrows during recession.

The article further reports the BCA as saying “This time around, however, the safe-haven factors have not turned in favor of the dollar thus far, even though it is premature to make definitive conclusions due to data lags. U.S. macro policies are the obvious reasons for the dollar’s diminishing role as a refuge: fiscal policy is a mess and the Fed is committed to devaluing the dollar”.

Where does the above leave me on the [U.S. Treasuries,] U.S.$ and physical gold [question]? 

  • To suggest U.S. Treasuries are other than – at best – a very short term ‘safe haven’ makes no sense, if it can be said ever to make sense in the current economic environment. 
  • The U.S.$ as a ‘safe haven’ is, of course, a common mantra of many financial markets advisors, conventional media writers and commentators, and Internet writers and commentators… [but]
  • I…believe…that physical gold is the best save haven against both fiat currency erosion (read in particular U.S.$ erosion), inflation, and deflation…where ‘safe haven’ is defined not to be referenced to gold’s price at a point in time, but rather is referenced to gold’s purchasing power over time

Until I convince myself otherwise, or someone else so convinces me, I continue to think physical gold currently is the best ‘safe haven’ as I have defined that term. Something for you again to think about, and then reach your own updated conclusions…

*; **

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As investors look for safe havens in a potential market panic, I am reminded of the adage, “In the land of the blind, the one-eyed man is king.” Today, I see several metaphorical one-eyed men in this land of the blind that could serve as safe havens were there to be a market panic. All of them have significant flaws. In this post I would like to discuss them one by one. Words: 780

2.  Richard Russell: Demise of the “Yankee Dollar” vs. the Rise in Gold

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3.  Here’s the Definitive Article on Why Gold is Going Even Higher

[Whatever you] call it – a bubble, a frenzy or a mania – there seems to be a large number of voices in the marketplace who just are not fans of gold, whether prices are moving up, down or sideways [but] the reality is that gold doesn’t possess the traits necessary for a financial bubble to form. [In fact, the current worldwide economic and fiscal environment suggests that gold will go MUCH higher. Let me explain.] Words: 2368

Ian R. Campbell About Ian R. Campbell
Ian R. Campbell, FCA, FCBV, is a recognized Canadian business valuation authority who shares his perspective about the economy, mining and the oil & gas industry on each trading day. Ian is also the founder of Stock Research Portal, which provides stock market data, analysis and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. Ian can be contacted at [email protected]