Are safe haven stocks still golden?

The gold market has been a rollercoaster of highs and lows recently, with demand spiking by 30% while also dropping to three-month lows. This volatility has left investors questioning whether gold is still considered a safe haven asset. Terry Heymann, the Chief Financial Officer at the World Gold Council, recently shared his insights on the current state of the gold market in an interview with CNBC Africa. Heymann highlighted the importance of gold as a risk management asset, particularly in times of economic turmoil and stress. He emphasized that gold has demonstrated its value as a safe haven asset, with its price surge over the past few months reinforcing its role in balancing portfolios. While Heymann refrained from making specific price predictions, he stressed the fundamental role that gold continues to play in diversified investment portfolios. In the face of global inflation reaching record levels, Heymann acknowledged gold's historical significance as a hedge against inflation, but also noted that other macroeconomic factors, such as interest rates and consumer behavior, contribute to gold's price movements. He encouraged investors to explore the various drivers of gold demand through resources like Gold Hub on the World Gold Council website. Despite the uncertainties in the market, Heymann remained optimistic about the outlook for gold, citing strong demand in the first quarter of 2022, driven largely by investments in exchange-traded funds (ETFs). Looking ahead, Heymann underscored the importance of gold as a balanced and risk-mitigating asset in investment portfolios, stressing its potential to weather various economic cycles. Beyond its investment value, Heymann also discussed the role of gold mining in driving economic and social development, particularly in regions like Cape Town where he was scheduled to attend the Mining Indaba event. The event, being the first in-person gathering of mining stakeholders in over two years, was anticipated to facilitate discussions on the future of mining in Africa, with a focus on sustainability, community empowerment, and economic growth. Heymann expressed his expectations for meaningful dialogues on leveraging mineral resources for climate transition and promoting responsible mining practices to benefit local communities and nations rich in mineral deposits.