Safe-haven assets diverge as AI jitters and war reshape markets

Demand for traditional safe-haven assets is being reshaped by the Iran war, elevated energy prices, AI-related technology losses and persistent concern about government debt, Reuters reported. The dollar has risen about 4% since late February, while the Swiss franc gained more than 2% against the euro this month as investors sought shelter during European bond-market stress.

German Bunds have also stood out. When US and French 10-year yields reached multi-decade highs, German yields fell as prices rose, a sign investors still view highly rated Bunds as a relative European refuge. Short-dated government bonds may offer more protection than long maturities because they are less exposed to fiscal worries.

Gold remains supported above $4,000 an ounce by central-bank purchases and geopolitical risk, although it fell after the war began as investors sold profitable holdings to cover losses elsewhere. The picture is therefore not a simple flight to one asset: each haven carries exposure to rates, debt, currency policy or market positioning.

Image: Unsplash.

Sources

• Reuters