With gold's safe-haven status eroding, analysts say volatility indexes like the VIX are becoming the preferred method for hedging risk.
As a traditional safe-have asset, gold typically rallies during periods of heightened economic risk, but in recent years gold's behavior has befuddled many analysts. Over the course of the over two-week U.S. government shutdown, for example, gold has fallen 3.35 percent.
"As the world becomes more virtual, the value of a physical commodity as a store of value or hedge against turmoil is falling," said Scott Nations, president and CEO of NationsShares, told CNBC Asia's Squawk Box.
(Read more: The odd reason why gold rose on the Senate deal)
"Here in the U.S., volatility indices like the VIX are now really where people are looking if they want some sort of 'Armageddon trade,'" said Nations.
The Chicago Board Options Exchange (CBOE) Volatility Index - also known as the fear index - shows the market's expectations for stock market volatility over the next 30 days. Traders buy the VIX when they expect a period of short-term volatility, and make profits when these expectations are realized. The VIX, which has an inverse correlation with the S&P 500, is often viewed as an effective hedge against falling stock prices.
On October 8 the VIX spiked from 13 to near 21 amid heightened fear of the rising risk of a U.S. debt default, but was still well off highs of 43 at the time of the last U.S. debt ceiling drama in August to September 2011 and highs of near 60 in October 2008. On Thursday it had fallen back to 14.71 as news of a deal in Washington to end the government shutdown and avert a debt default, settled market anxiety.