Gold seems to be a safe haven, says Wealth Enhancement's Doug Huber

Market Overview - The major indices, including the Dow, S&P, and NASDAQ, experienced significant declines, with the Dow posting its worst drop since May and the S&P and NASDAQ since April, marking the largest weekly decline since early August [1] - The market's recent performance has been heavily influenced by the AI narrative, particularly in the semiconductor and tech infrastructure sectors [1] AI and Market Vulnerability - The market appears bifurcated, with the potential for AI execution to benefit multiple sectors, but disillusionment could lead to broader valuation declines [2][3] - Key questions are emerging regarding the long-term return on investment (ROI) from data center spending and the sustainability of growth in this sector [3][4] Safe Haven Assets - In light of market volatility, metals, particularly gold, are being viewed as safe haven investments, driven by central bank buying and investor disillusionment with the US Treasury and dollar [5] - The opportunity cost of holding non-yielding assets like gold decreases if interest rates continue to decline, making gold more attractive [5] Impact of Government Shutdown - The ongoing government shutdown is creating uncertainty in the bond market, with potential layoffs and legal challenges affecting consumer demand and local economies reliant on federal work [6][7] - There is speculation that aggressive government spending cuts could stabilize longer-term yields, despite concerns over rising debt levels [6][8]