- Pandemic-driven volatility has seen little impact on premium-tech stocks.
- Amazon and Google surge 55% and 37%, respectively, over 12 months.
- Growth in demand for gold by central banks fuels investor appetite for tech stocks.
Google and other premium-tech stocks are fast becoming the new era of digital gold as traders place a greater value on premium-tech despite the prevalence of heightened volatility and uncertainty in global markets.
Despite the worst pandemic in more than a century, volatility that historically induced deep recessions has seen stock markets rebound, with the value of premium technology stocks acting as a safe haven.
During periods of high volatility, investors generally pour into safe haven assets such as US Treasury bonds and precious metal assets, most notably gold.
In 2020 when volatility spiked following a declaration by the World Health Organisation of the coronavirus pandemic, a sharp and relatively short dip in global equities hit alongside a solid but not boom-like take up of gold, despite its safe-haven status.
In fact at the time of the pandemic, Google was trading at US$1400/share versus US$1550/ounce for gold, while Amazon?s stock was higher at US$1800/share.
Fast-forward 12 months, gold remains anchored in an US$1800-$1900 trading range, while Amazon and Google have gained 55% and 37% respectively, as a changing mix of investors propel premium-technology stocks higher into must-keep territory in an investor portfolio.
Interestingly, demand for gold by central banks, which has enabled an expansion of their balance sheets, has helped fuel demand for technology stocks despite elevated levels of volatility over the last 12-months.