Safe-Haven Demand

Safe-haven demand means investors are buying assets they believe are safer during uncertainty. In simple terms, safe-haven demand rises when investors want protection. Safe-haven demand is important because it can affect Treasury bonds, the U.S. dollar, gold, and other assets viewed as safer. When fear rises, investors may move money away from riskier assets and toward safe havens. For example, during a geopolitical crisis, investors may buy U.S. Treasury bonds, causing their prices to rise and yields to fall. Safe-haven demand does not guarantee an asset will rise. What investors consider safe can change depending on the situation.