Gold Rebounded amid Heightened Contagion Risk. Crude and Risk Assets Slumped

6 May 2010 6 May 2010

BonTrade

Gold's intraday reversal despite the euro's weakness was impressive as it signaled heightened risk aversion - investors find both USD and gold as safe-haven assets. While the norm for USD and gold's correlation is inverse, the 2 instruments move inline when there is high uncertainty in the market and/or when there is financial crisis.