– This is the script of CNBC's news report for China's CCTV on August 25, Tuesday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Gold prices fell on Monday as sharp declines in stocks forced some investors to sell profitable gold wagers to meet loan losses.
The most actively traded contract, for December delivery, fell $6, or 0.5%, to settle at $1,153.60 a troy ounce on the Comex division of the New York Mercantile Exchange.
Many investors buy stocks with borrowed money, putting down deposits, known as margins, that must be maintained at a certain level if the value of those stocks falls. When stock prices fall, these traders receive so-called margin calls, or requests from their broker to top-up the deposit with fresh cash.
You hear it again and again. When markets get volatile or uncertainties spike, buy gold. It's traditionally considered one of the safer assets because it acts as a store of value. But the precious metal pays neither a dividend, coupon nor rent.
So we crunched the numbers using data analytics platform Kensho to find out whether gold's safe haven status really holds up.
According to statistics going back to 2005, a bet on gold in times of market turbulence is often no better than a coin toss.
Worries about global deflation, however, would not bode well for gold, typically seen as a hedge against inflation.
And analysts say that Fed's decision on rate hikes will be key for the gold.
[Barnabas Gan | Economist | OCBC] "I think the golden question - pun intended - will be for the fed that really, will the fed actually hike interest rates? Well, if the fed hike interest rates, that will be very good for the greenback, expensive greenback, but conversely, that will be very bad for gold prices. So, well, there's actually some markets hawks saying in the market watcher saying that the possibility for the fed to hike in September has more or less been diminished, being played out by the market."
Let's take a look at other precious metals.
Platinum futures capped the biggest decline in more than two years as concerns over China's economy roiled markets and damped the outlook for commodities demand.
Platinum has fallen 18 percent this year as an economic slowdown deepened in China, the world's top consumer of metals, grains and energy. The white metal's use in pollution-control devices for cars accounts for about 40 percent of demand, according to Bloomberg Intelligence data.
Another commodity which is facing declining prices is diamond.
Data show that for the past 12 months, price ....
A diamond might be forever, but apparently producers and retailers are wishing for a sooner return of global inflation, which would push prices higher for diamonds and precious metals.
CNBC's Qian Chen, reporting from Singapore.