Investors have been rushing to the sanctuary of gold and alternative safe-haven currencies instead of the dollar, which reached a 22-year low. Low US bond yields, political uncertainty ahead of the elections and concern about the difficulties the US is having in getting the pandemic under control are all weighing on the greenback.
The dollar and US government bonds have been losing their appeal as safe-haven investment destinations of late. Instead, gold and alternative currencies, like the Swiss franc and Japanese yen, have become preferred sanctuaries for investors looking to shelter from the economic fallout from Cobvid-19.
Over the past week, trends that had already begun to appear in financial markets accelerated. The dollar fell to a 22-month low and general consensus is that the world’s reserve currency may remain under pressure for some time to come. Gold surprised even the most optimistic expectations when it broke through $1,900 – a record high – and headed towards $2,000 before taking a breather.
All this as the global number of Covid-19 cases passed 16 million last week, US infections are closing in on 4.5 million, and new cases arose in countries that were thought to have overcome the virus….