During recent bouts of market turmoil, investors have bypassed gold in their hunt for havens, choosing instead the greenback, yen or Treasurys.

Share story

Investors have grown immune to the economic and geopolitical risks that typically have driven demand for gold.

That’s how Richard Hayes, the chief executive officer of Australia’s Perth Mint, summed up the reason behind bullion’s slump to a 19-month low despite tensions between the U.S. and China and the collapse of the Turkish lira that roiled markets. The World Gold Council said this month that demand for the metal in the first half of the year was the weakest in almost a decade.

Gold has slid about 13 percent from this year’s high in the spot market as the dollar strengthened and robust U.S. economic growth bolstered the case for the Federal Reserve to keep raising borrowing costs. Even during recent market turmoil, investors have bypassed gold in their hunt for havens, choosing instead the greenback, yen or Treasurys.

“The world, to some degree, has been quite used to bad news,” said Hayes at the state-run mint that refines 15 percent of the world’s gold. “If you were to go back seven or eight years, any one of the trade wars, or what’s happening in the Middle East, or China, Brexit, the rise of the far left and far right, any one of those events would have been enough to make a fairly significant impact on volatility of prices of precious metals.”

Gold for immediate delivery was at $1,182.66 an ounce Friday in New York, on track for the sixth straight weekly loss, the longest stretch since December 2016. The metal touched $1,160.39 on Thursday, the lowest since January 2017.

A quick check of history shows the lack of demand for gold during turmoil this year isn’t unique.

“Gold has not tended to behave like a safe-haven asset in the past during times of stress when the dollar has appreciated at the same time,” Simona Gambarini, an economist at Capital Economics, said in a note to clients emailed Tuesday. “During the Asian crisis, investors fleeing developing countries did not seek the safety of gold either — instead they sought refuge in U.S. Treasurys and the dollar,” Gambarini wrote.