What's going on?

As we reported, stock markets around the world sold off dramatically last week! Gold was one of the few things that went up in value: it had its biggest 5-day gain since January -- rising 4% on the week.

What does this mean?

Gold is doing its job! Gold and US government bonds are two examples of what investors often call �safe-haven� investments, meaning they go up in price when most other financial investments go down. Unsurprisingly, US government bonds also had a strong week.

Why should I care?

1. In theory, owning some �safe-haven� assets like gold means that your portfolio doesn�t lose as much money when stocks and other riskier investments go down. The money you make from gold can be reinvested into the now lower priced stocks in a process called �rebalancing� � especially if you think that stocks will recover from their sell-off.
2. In the medium-term, gold�s price is likely to be influenced by whether or not the US Federal Reserve raises interest rates at its September meeting. A rate increase would likely be bad for gold � but if market turmoil continues, the Fed is less likely to raise rates.