Gold Drops in Price, Gains Ground During Thursday Selloff
Today’s market bloodbath offers a prime example of why gold is the asset to own as the market continues its downward trajectory. Gold lost $10 today, or 0.85% of its nominal price. Bad news? Hardly. At the same time that gold was losing ground in nominal terms, gold’s purchasing power in the market increased because it fell less on a percentage basis than all other assets. This pattern is far from a one-off anomaly. This is how gold reacts in deflationary environments; it increases in value while its nominal price falls. We saw the same pattern unfold in 2008.
Granted, this is just one day in the markets, but it is a microcosm of a bigger story unfolding.
See today’s dashboard below: