Investors Are Dumping Gold At A Historic Pace

Gold’s relative strength index, or RSI, hit historic lows as investors ditch the metal despite growing uncertainty in the markets.

SentimentTrader, a site that tracks market data and trends, said that Gold’s RSI hit a level that has been seen less than 1% of the time since 1971 in a post on X.com. 

In times of economic instability, gold investors say that the precious metal is the best way to ensure that their investments are holding value. But despite inflation ticking back up, an ongoing war in Ukraine and Russia, and now a new escalation in the Israel-Palestine conflict, gold prices are down on the month. 

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The SPDR Gold Trust (NYSE:GLD) has traded up slightly throughout the last week, up 2% in the last few days. But, before the bounce, the fund was at its lowest point since March. It’s down more than 6% in the last six months, while the SPDR S&P 500 Trust ETF (NYSE:SPY) is up more than 6% in the last six months. 

Golds Or Bonds? Demand for gold could be lower as some investors opt for treasury bonds that pay yields of around 5% and are virtually risk-free. Typically, gold is seen as a pretty stable, safe investment. But if that’s all you’re looking for, a safe investment, you may as well go with the T-bills given their current yield rates. 

Growing geopolitical tensions could help gold prices in the short term. When Russia invaded Ukraine, $GLD traded higher in the following weeks.

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