Gold, bitcoin neglect to save investors against Thursday’s stock market meltdown

  • Despite Thursday’s stock market plunge, non-traditional and traditional hedges as gold and bitcoin weren’t immune from the sell off.
  • Technological innovation stocks led a steep sell off in the industry, with the Nasdaq 100 index down pretty much as 5.5 % in Thursday afternoon trades.
  • Gold traded down pretty much as 1 %, while bitcoin fell six % on Thursday.
  • Often, investors seem to these non-traditional assets to provide shield during stock market sell offs.

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Technology stocks led the marketplace decline, with the Nasdaq 100 index down as much as 6 %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell eight %, seven %, in addition to six % respectively.

Meanwhile, the S&P 500 fell almost as four %, while the Dow Jones industrial average fell more than 1,000 points for a loss of 3 %.

The steep technology driven sell-off in the stock market spread to non-traditional and traditional profile hedges like bitcoin and yellow.

Gold fell pretty much as 1 % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell as much as six % to $US10,455.

The two gold and bitcoin have just recently been bid in place by investors anxious about the growing balance sheet of the US Fed and its the latest policy overhaul that will probably result in higher levels of inflation.

Last month, gold touched all-time highs during $US2,089 an ounce, while bitcoin reach a multi-year high of $US12,473.

Investors typically look to both gold as well as bitcoin as a hedge to inflation, deflation, and falling stock prices due to their historically low correlation to equities.

But that historical correlation did not play out on Thursday.

A traditional asset type that did offer protection to investors from Thursday’s promote sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up pretty much as 0.20 %.

For all of the talk with Wall Street analysts that the favorite 60-40 investment profile which balances stocks and bonds is “dead,” it is alive and well today.