Trading in Turbulent Times: What are Safe Haven Markets?

US President Donald Trump’s trade tariffs announcement on 7 April 2025 caused a significant increase in market volatility and uncertainty. For all types of traders, this can often be a challenging environment and lead some towards safe haven markets.  

This guide will explore what safe haven markets are and why they matter. Please note that this material is for informational purposes only and not financial advice. 

Current Market Volatility and Its Causes 

The Role of Trade Tariffs 

Trade tariffs are essentially taxes imposed on imported goods, and their primary purpose is to shield domestic industries from what is perceived as unfair competition. On 7 April 2025, Donald Trump’s White House enacted an aggressive use of tariffs in an attempt to rebalance trade deficits, sparking a significant increase in volatility in global markets.  

These measures have now led to retaliatory tariffs from other nations, unsettling the global trade environment. This has led to sudden shifts in market sentiment as investors scramble to reposition their portfolios and try and hedge against risks.  

The increased volatility means that markets can swing dramatically in value within short periods, leading some investors to seek out alternative, steadier markets or simply exit the market and stay in cash. 

What Are Safe Haven Markets? 

Safe haven markets refer to asset classes or segments that have historically tended to maintain or increase in value during market turbulence, though this is not guaranteed and involves risk. While these assets are not guaranteed to eliminate risk, they are typically viewed by some market participants as having the potential to offer a stabilising influence within diversified portfolios.  

This overview describes several asset classes that have been categorised as safe havens historically. It is important to note that not all markets will be suitable for all individuals and past performance does not guarantee future performance. 

Key Safe Haven Markets for Trading 

Let’s discuss several safe haven markets. 

1. Gold and Precious Metals Markets 

Gold is frequently cited as one of the traditional safe haven assets. Unlike financial instruments tied to specific currencies or economies, gold is a tangible asset that some market participants believe can hold intrinsic value over time. Other precious metals, such as silver, are sometimes discussed alongside gold, though these metals are more volatile. 

There are multiple ways to gain exposure to gold.  

• Gold ETFs. An exchange-traded fund is designed to track the performance of gold by investing and storing physical gold or by gaining exposure through derivatives such as futures contracts. Shares of the fund trade on the stock market and can be bought and sold like regular company shares.  
• Gold mining stocks. Companies involved in gold extraction and processing have an indirect link to safe havens. A gold mining company's performance can be tied to the price of gold and can offer exposure to the metal.
• Gold CFDs are leveraged derivatives that allow traders to speculate on the price movements of gold without owning the physical asset. The trader and broker exchange the difference in value between the opening and closing price of the contract.

With Admiral Markets, you can trade Gold vs US Dollar CFDs. It is important to note that while gold may be seen as a safe haven, its price fluctuates greatly as it is still affected by shifts in supply, demand, interest rates and inflation. Therefore, the historical performance of gold does not guarantee future results.

2. Government Bonds and Bond Funds 

Government bonds, particularly those issued by countries considered to have a stable economic and political system, are often referenced by market participants as having relatively low risk during periods of market turbulence. These bonds are usually supported by the credit of the issuing government and typically provide a fixed income stream. 

There are various ways to gain exposure to bonds.  

• Direct purchase. Some investors can purchase bonds directly from the government or via the secondary market.  
• Bond ETFs. A bond exchange-traded fund (ETF) invests in many different government bonds. Investors can purchase shares of the bond ETF, providing broad exposure to a diversified portfolio of bonds.  

Admiral Markets offers various bond ETFs to invest in from providers such as iShares, Lyxor and Vanguard. You can search the different instruments available on the Contract Specification page.  

3. Currency Pairs 

Currencies that are associated with countries having well-established economic frameworks are sometimes regarded as safer stores of value during periods of market instability. Examples often cited include the U.S. dollar, the Swiss franc, and the Japanese yen. The underlying idea is that, during times of uncertainty, there may be a shift toward currencies that are perceived as stable. 

However, in reality, if the economy of the currency you are trading in is the cause of market turbulence, then it may not offer a store of value or stability to invest. It’s important to educate yourself on the global situation during times of turbulence in the financial markets.  

With Admiral Markets, you can trade over 80 Forex CFDs 24 hours a day, 5 days a week. View the full list of currency pairs on the Contract Specification page.  

4. Defensive Stocks 

Defensive stocks refer to the shares of companies that produce goods and services considered to be a necessity. It includes sectors such as healthcare, utilities, consumer goods and food and beverages. As there is a consistent demand for these products, even during market turmoil, they may offer a store of value and possible growth.

Conclusion 

Trading and investing during economic turmoil can be challenging. In this article, we have covered several asset classes that are considered safe haven markets. However, deciding which asset classes will be a store of value or offer growth is difficult as no one can predict the future.

By being aware of how different asset classes perform, investors can gain helpful insights into the current state of the market. Another option for investors is to stay out of the market during economic turmoil until conditions improve for their individual strategies.

A demo account can be used to trade and invest in a virtual environment. This can be useful to help practice trading a certain strategy or testing an idea.

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