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Commerzbank: gold has not lost its safe-haven status

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Gold has been hurt by “forced selling” by investors needing cash due to weakness in equities and other markets, but that does not mean the precious metal has lost its safe-haven status, said Commerzbank analyst Carsten Fritsch. He pointed out that that outflows from gold-backed exchange-traded funds were 21 metric tons on Friday, which was the most since November 2016. A strong U.S. dollar is also weighing on gold prices. “The current preference for liquidity and the U.S. dollar is overshadowing gold’s status as a safe haven,” Fritsch said. “However, we do not share the view of those who believe that gold has already lost this status. We regard its current weakness as merely a temporary anomaly like in the autumn of 2008, when gold likewise came under pressure for several weeks but subsequently rose all the more sharply and nearly three years later achieved a record high that still stands to this day.”

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