When a sharp selloff in AI stocks wiped roughly $1 trillion from tech valuations earlier this year, gold unexpectedly moved lower as well. For some investors, the drop raised a troubling question: if gold is the ultimate safe haven, why did it fall alongside risk assets?
According to Tarek Saab, CEO of Texas Precious Metals, the answer lies in how markets behave during periods of sudden volatility.
“Gold remains uncorrelated to tech assets and to the broader equities markets at large, which is why many continue to increase gold exposure in strategic portfolios,” Saab told Benzinga.
Gold: Short-Term Moves Vs Long-Term Role
During sharp market shocks, investors often sell multiple asset classes simultaneously as they raise cash or rebalance portfolios.
That dynamic can temporarily cause gold to move in the same direction as equities.
“On any given day, gold may trade similarly to other assets, but there is no measured correlation to tech,” Saab said.
Structural Demand For Gold Remains Strong
Despite the short-term volatility, Saab remains optimistic about gold’s longer-term outlook.
Central banks around the world have been steadily increasing their gold reserves, a trend that many analysts view as a structural driver of the metal’s bull market.
“The market certainly became overheated with the recent January spike,” Saab said. “But we remain structurally bullish as Central Banks globally continue to aggressively add gold to their reserves.”
As investors position for the long-term gold thesis Saab describes, many gain exposure through vehicles like the SPDR Gold Shares (NYSE:GLD), which tracks bullion prices, and the VanEck Gold Miners ETF (NYSE:GDX), which offers leverage to the metal through mining stocks.
If that demand continues, gold’s role as a portfolio hedge may remain intact — even if the metal occasionally moves in step with stocks during turbulent trading sessions.
Image: Courtesy of Texas Precious Metals
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