GEOPOLITICAL events seem unprecedented because they are largely unpredictable, and the factors that trigger them rarely happen in the same way twice.
But this is consistent – tensions and uncertainties always prompt plentiful bets on which investments are “safe”, and which are not.
Traditionally, US 10-year Treasuries, the US dollar, and selective commodities such as gold and oil, are considered safe-haven assets. Gold, in particular, has a reputation as a store of value. In times of geopolitical instability, when the value of paper currency and other financial instruments can be volatile, gold is perceived to have a stable intrinsic value.
Safe-haven assets also include currencies such...
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