Classic Safe-Haven Assets

1. Gold

• The quintessential safe haven for 5,000+ years. Zero counterparty risk (a physical asset, not a liability of any entity)
• During the 2008 GFC: Gold rose from ~$720/oz (Oct 2008) to $1,920/oz (Sep 2011) — a 167% gain
• During COVID-19: Surged from $1,520/oz (Jan 2020) to $2,075/oz (Aug 2020)
• Hit all-time high of ~$2,450/oz in May 2024 amid geopolitical tensions

2. U.S. Treasury Bonds

• Backed by the 'full faith and credit' of the U.S. government. The 10-year Treasury yield is the global risk-free benchmark
• During 2008 GFC: 10Y yield fell from 4.0% to 2.1% as investors poured into Treasuries
• During COVID crash (March 2020): 10Y yield briefly hit 0.31% — an all-time low
• U.S. national debt: ~$34 trillion (2024), yet Treasuries remain the ultimate safe haven due to dollar reserve currency status

3. Swiss Franc (CHF)

• Switzerland's political neutrality, low debt-to-GDP (~40%), strong banking system, and independent monetary policy
• EUR/CHF fell from 1.45 (2010) to parity during the European debt crisis, forcing the SNB to impose a 1.20 floor (Sep 2011–Jan 2015)

4. Japanese Yen (JPY)

• Japan is the world's largest net foreign creditor. During crises, Japanese investors repatriate capital → yen strengthens
• USD/JPY fell from 124 to 76 between 2007–2011 during the GFC

5. U.S. Dollar (via DXY)

• The world's primary reserve currency (~58% of global reserves, IMF 2024). During crises, dollar-denominated debt creates demand for USD

When Safe Havens Fail

• March 2020 'Dash for Cash': Even Treasuries and gold sold off briefly as investors liquidated all assets for cash
• Rising rates environment (2022): Both stocks and bonds fell simultaneously — the traditional 60/40 portfolio failed
• Japan's yen lost safe-haven status temporarily in 2022-2024 as BOJ maintained ultra-loose policy while others tightened