Gold vs Treasuries: New data shows why gold may be the ultimate safe haven

Over the last six months, gold has behaved like a textbook High-Quality Liquid Asset (HQLA)—a classification typically reserved for assets like sovereign bonds under global banking rules (Basel III), shows data analysed by the Gold World Council. This means gold is not just valuable—it’s fast, flexible, and reliable when markets get messy. 

A High-Quality Liquid Asset (HQLA) is defined under the Basel III liquidity framework as an asset that can be easily and immediately converted into cash with little or no loss of value, even in times of stress.

 

The Basel III regulatory framework is an international set of banking regulations developed by the Basel Committee on Banking Supervision to strengthen bank capital requirements, improve risk management, and enhance liquidity and stability in the global financial system

 

 

Using intraday minute-by-minute data, the World Gold Council found  that gold’s average daily volatility is 0.027%. This is above the volatility of the 10-year on-the-run (OTR) Treasury notes at 0.016%, but in line with 30-year OTR US Treasury bonds at 0.028%.

 

Further, to test resilience under stress, the Council examined three recent periods of elevated market-wide turmoil:

 

10–13 February 2025 – Trump announced a 25% tariff on steel and aluminium imports.8 During this period, both the 10-year and 30-year OTR Treasuries experienced an uncharacteristic selloff and noticeable volatility spikes, while gold remained largely unaffected.

 

2–11 April 2025 – Trump announced global tariffs on 2 April (dubbed “Liberation Day”) that were escalated and broadened in subsequent days but eventually paused on 9 April for most trading partners (except China).10 Gold’s volatility increased but was similar to that of the 10-year OTR Treasury and below that of the 30-year during this period. Further, while a good portion of US Treasury volatility was driven by price pullbacks as tensions increased – contrary to what would have been expected in a flight-to-quality period – gold prices soared and reached record levels. 

 

21–23 April 2025 – Gold reached a new all-time-high (ATH) on 21 April amid broader equity market turmoil but later fell, following subsequent statements from Trump announcing that tariffs on China would "come down substantially".11 While gold volatility spiked, it remained below previous peaks observed in the 10- and 30-year Treasuries. 

 

Gold’s volatility factor is in line with, if not more favourable than, US Treasuries during periods of turmoil 

Sources: Bloomberg, World Gold Council; Disclaimer *Daily volatility computed using returns on 1-minute data increments from 6 November 2024 to 30 April 2025. Gold based on spot price (XAU) in US$/oz. US Treasuries based on “on-the-run” (OTR) 10-yea

 

Gold and US Treasuries intraday spread (bps) *

 

Gold’s spread is calculated using spot gold (XAU) priced in US$/oz. US Treasuries based on “on-the-run” (OTR) 10-year and 30-year notes, respectively.

       

Liberation Day did not phase gold Intraday spread (bps) on Liberation Day and April 2025

Over the past six months gold has shown characteristics associated with HQLAs, including: 

 

Volatility: Gold demonstrated comparable or superior stability to intermediate and long US Treasuries during recent market shocks, highlighting its lower-than-assumed volatility profile. 

Spreads: Gold’s bid-ask spreads remained narrow – or normalized quickly – during periods of market stress, rivalling those seen in 10- and 30-year US Treasuries. 

Volume: Gold’s robust daily trading volumes rival that of 10-year US Treasuries, reinforcing its status as a deep and actively traded market. 

Here’s what that means for you as an investor:

 

 1. Volatility: Gold Holds Steady When Others Panic

When stock markets dipped and U.S. Treasuries—usually the safest bet—wobbled, gold held its ground. During major geopolitical and tariff-related shocks this year (Feb–Apr 2025), gold showed:

 

Lower price swings than 30-year U.S. Treasuries

• More stability than top-traded equities like Nvidia or Tesla
• Daily price changes averaging just 0.03%, compared to 0.11–0.14% for tech stocks

 

 Why it matters: In market chaos, gold protects your wealth better than many high-profile stocks and bonds. 

gold’s trading is not only substantial but also consistent, placing it on par with the highly liquid 10-year Treasury market – often recognised as the most traded and liquid government bond globally.

 

Liquidity: You Can Buy or Sell Gold Fast—and Fairly

 

Liquidity isn’t just about volume; it’s about how easy and cheap it is to trade. Gold’s bid-ask spread—a key cost in trading—stayed narrow and normalized quickly during global stress, even outperforming U.S. Treasuries at times.

 

Average spread: 2.2 basis points (bps), vs 1.8 bps for 10Y Treasuries

 

Tighter spreads = lower costs when you buy or sell

 

Why it matters: Whether it’s physical gold, ETFs, or digital gold, you’re unlikely to overpay or lose value due to lack of demand.

 

3. Trading Volume: Gold Is Heavily Traded—More Than You Think

Gold's daily trading volume (US$145 billion) is on par with 10-year U.S. Treasuries—the most traded government bond in the world—and far above big stocks:

 

4x more than Nvidia or Tesla

 

100x more than Procter & Gamble (P&G)

 

Why it matters: This kind of market depth ensures that gold prices reflect real value, not hype. 

Intraday volatility of gold, NVDA, TSLA and PG*

 

 4. Stress-Tested: Gold Rises When Others Fall

Gold's role as a "flight to safety" asset isn’t just theory—it’s backed by data:

 

During the April 2025 tariff shocks, gold hit an all-time high, while stocks and bonds tumbled

 

Even as Treasuries lost their shine amid selling pressure, gold remained a go-to asset for investors worldwide

 

 Why it matters: When crises hit, gold isn’t just a hedge—it’s a safe harbor.

 

 What This Means for You

Whether you're planning your retirement, saving for your child’s education, or just trying to protect your capital in a volatile world, gold deserves a strategic seat in your portfolio.

 

"During recent periods of market stress, gold maintained price stability, saw spreads tighten or normalise quickly, and sustained robust trading volumes. Its performance matched or exceeded that of benchmark assets like the 10-year Treasury, reinforcing gold’s resilience and liquidity.  Unlike many other assets, gold is universally recognised, free from credit risk, and accepted across borders, making it uniquely suited to meet the global and stress-tested liquidity standards required for Level 1 classification," noted the report.

 

 Gold can help:

Diversify your equity-heavy investments

 

Stabilize portfolio returns during global shocks

 

Offer long-term value preservation, especially in times of currency or policy instability

 

 Tip: Keep gold to about 5–10% of your total investment portfolio, and balance it with equities and fixed income instruments.