(MENAFN- ProactiveInvestors)What is the point of owning gold if not as a safe haven when things are tough. It was a topic raised by a number of commentators this week as the price resolutely refused to rise despite the ongoing crisis in Greece and emerging uncertainty in China. Admittedly gold had largely priced in that a solution would be found to Greece's debt problems. The new set of proposals submitted to creditors by Greece's PM Alexis Tsipras which amounts to €4bn more in taxes than the Greeks had already rejected in last week's referendum underlined it was a good call. China is harder to understand By any stretch a US$3trn slide in the value of its stock markets and 40% of shares being suspended is a market worrying event yet gold the supposed safe haven call barely flickered. A benign set of Fed minutes mid-week also barely registered. Analysis this week from Dutch bank ABN-Amro suggests that the arrival of gold products such as ETFs had changed the game for the metal. As well as opening the market to the wider public it has also meant gold being bought not only as a protection for uncertain times but also as a means to speculate. 'The latter goes completely against gold's safe-haven character and at times it more than overshadows it' said the bank. ABN argues that at the height of the global financial crisis gold prices dropped sharply because investors valued cash more than gold as liquidity dried up. 'At times of severe crises gold could not live up to its safe-haven status.' The performance recently suggests it is again not living up its safe haven status. 'Investor sentiment has deteriorated because of sharp fall in Chinese equities and the Greek debt crisis but gold prices have gone down instead of up.' ABN reckons this is because positions in precious metals in general have been liquidated while the outlook for Chinese jewellery demand has deteriorated. The bank believes a higher US dollar and higher US interest rates will push the price even lower and to US$1000 by the year end. Swiss bank UBS is a little more upbeat. While the dull recent performance seems anything like a safe-haven bet given the uncertainty around the world in relative terms gold is actually doing better than other assets in this space it said. Gold has fallen by 3% since late June compared to losses of 14% in crude oil 10% in copper 14% in nickel and 7% in both platinum and silver. And of course the metal has held up much better than some stock markets such as China. One reason it has not done even better suggests UBS is that as money was not taken out of gold to invest in Chinese equities in the first place falling share prices won't see money recycled back i to the metal. Spot gold was trading at US$1160 shortly after trading got underway in teh US Friday down about US$12 on the week.
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