Gold has reaffirmed its traditional role as a safe haven asset amid the global geopolitical turmoil, shows an article in RBI’s December Bulletin using a simulation-based sensitivity framework.
Volatility Spectrum
In contrast, crude oil is the most sensitive to geopolitical shocks, consistent with its exposure to supply disruptions and regional conflicts. Silver is more volatile than gold due to its industrial demand, but far less sensitive than oil.
Emerging Barometers
Moreover, US Treasury securities exhibit a steady rise in volatility with increasing geopolitical risks, reflecting their role as a flight-to-safety asset during global uncertainty.