Trading community believes that bullions like gold and silver are safe heaven investments. If there is a fall in financial securities like stocks and bonds bullion attracts safe heaven demand means money moves out of equity and gets into commodities like gold and silver. This is the common logic that entire trading community uses, but market psychology tells a different story.
In trading psychology we believe assets might be different but traders are not. Thus, when a serious fall starts it doesn't matter if you are in equity or commodity like gold, silver, crude. They all will fall. Perhaps severity of fall might be different but direction will be the same.
Most traders usually have positions in more than one financial assets. When one falls they have to sell some other assets to pay the additional margins and this creates a viral infection that moves from assets to assets or from equity to commodity. In such times, demand supply and other fundamental considrations are of little consequence.
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