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Wary investors seek other havens over gold amid China market rout

Posted on 26 August 2015

Gold has failed to rally in the face of China’s stock market crisis as investors, scorched by a brutal end to the market’s 12-year bull run, chose cash and bonds for safety over bullion while they seek clarity on the timing of a U.S. rate increase. While at first glance, the failure of a “haven” asset to respond may seem odd, this behaviour is by no means unusual.
As a broad rule, bullion tends to benefit from stock market weakness as an alternative asset, but previous equity crashes show the initial price response can be to fall. “In 2008, when Lehman Brothers collapsed, we saw a two-week decline in gold prices, despite having a perfect storm for gold,” LBBW analyst Thorsten Proettel said………………………………………..Full Article: Source


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