Once again, gold looks like a bad place to be when the stock market is tanking. In New York, gold was down $27 (U.S.) an ounce, to $1,522, in late-morning trading on Thursday. In percentage terms, that's a 1.7 per cent dip, which is the biggest setback for bullion since May 5 and is slightly worse than the S&P 500's decline of 1.5 per cent on Thursday.
Why is gold not demonstrating its haven status? Part of the problem is that investors continue to flock to the safety of the U.S. dollar and U.S. Treasury bonds during tumultuous days for stocks, and Thursday is no exception: The U.S. dollar index jumped to 75.6. Since gold is priced in U.S. dollars, it tends to fall.
At the same time, the inflationary threat - which can be good for the price of gold - appears to be subsiding, at least for now. Rising energy prices have been a big factor behind recent high readings for headline inflation around the world. But crude oil prices fell sharply on Thursday after the International Energy Agency said it would release 60 million barrels of oil from emergency stockpiles over the next 60 days, to help bring down the price of oil.
It seems to be working: Oil fell to $91.20 a barrel in New York, down $4.21 - hitting its lowest level in four months.