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May Not Beat Gold & Forex as Safe Haven Asset
On 3 January 2020, a United States drone strike killed Iran’s most prominent military commander, which increased the tensions between the U.S. and Iran and could trigger a broader Middle East conflict. Investors worried the conflict between the two nations might escalate into a prolonged and damaging war, so some of them increased the allocation of gold and Forex, while others rush to cryptocurrencies, bitcoin, in particular, driving their prices to surge high. Gold and traditional currencies such as the US Dollar, Japanese Yen, Euro, Pound or Chinese Renminbi are all universally accepted as safe-haven assets, but what about bitcoin? Is BTC a safe-haven asset under the growing geopolitical and economic turmoil?
Is BTC a Safe Haven Asset?
Amid all the turmoil and confusion, though bitcoin managed to reach $9,011, the highest price of the year so far, it is still a high-risk bet and cannot be a safe haven even in times of turmoils for the following reasons:
Forex and Gold as Safe-haven Assets are More Profitable
In uncertain times, gold and forex have remained the popular and most reliable safe-haven assets which investors will turn to.
The Japanese yen and gold rallied on the news of the killing of Iran’s military commander. USD/JPY surged to a three-month high of 110.2 in Asian trading. Meanwhile, the US dollar also started the week on positive footing amid optimism over US-China trade relations.
For the gold market, while geopolitical uncertainty will add We can describe volatility as how much the value of an asset changes over a given time. A volatility index... More to it, investors should pay attention to the growing global debt. As central banks and governments continue to pump liquidity into financial markets which will force gold to surge to higher prices in 2020.
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