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This chart shows why investors are in love with gold right now

Feb 24, 2016, 14:30 IST

Reuters

It comes as no surprise that the price of gold is continuing to rise today, reaching $1,225.60 per kilogram.

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After all, oil prices are down to around $30 a barrel from triple digit highs in summer 2014, global stocks are officially in bear market territory, China's economy is slowing and its cash position looks shaky, and Britain's future in the European Union looks uncertain and it's killing the pound.

Basically, globalisation is collapsing around us, and it's pretty crappy to be an investor right now.

But gold is seen as a haven for cash. It doesn't pay a coupon like a bond, and it doesn't pay a dividend as a stock would, but it does mean you own ounces of a physical precious metal that you can hold onto.

A spike in the gold market usually means investors are worried about the state of more volatile asset classes like stocks or bonds.

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This chart from Vincent Zoonekynd and his team at Deutsche Bank summarises perfectly how gold is keeping investors afloat while a majority of asset classes are swinging back and forth or cratering when it comes to returns:

Deutsche Bank

In short, it may not be gaining much ground, but at least it's stable. In today's market, stability is hard to find.

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