Market Update 10th November 2026

Safe Haven Asset

Last week saw a lot of activity around the world. There were the US mid-terms and the election in Israel, both of which caused market reactions only adding to the volatility we have been getting used to and highlighting again the role that diversifiers and safe haven assets play during these times.

Last week saw an election in Israel, results are in but no conclusion. No party secured a majority so now the leader of the current opposition has 28 days to form a coalition. This isn’t anything new for Israel, all governments have been coalitions, so no party has ever outright won an election.

Also last week, a historic mid-term election for the US with a “blue-wave” across the House and Senate. In the Senate the Democrats gained five seats (seven if you include two independent), and the Republicans lost seven, this was beyond what people were predicting. In the House the Democrats gained 42 seats and Republicans lost 42. This was historic because some of the red seats turned have been held by republicans for decades.

In Texas Senator James Talarico became the first Democrat to win a Texas Senate seat since 1988. In Kanas, the first Democratic Senator has been elected in 94 years. In Michigan, Democrat Abdul El-Sayed became the first Muslim ever elected to the Senate. There is also the first Native American Senator to be elected. In addition to these legislative breakthroughs, several gubernatorial races yielded an impressive list of historic milestones.

The markets last week have not reacted well, the NASDAQ was down 5.5% on Thursday last week, gold is up, the US dollar is down. The concerns are surrounding the impact this will have on AI companies. Investors believe there is a potential for increased regulations for AI and data-centre businesses. This isn’t a new concern though, there have been growing concerns over data centre builds for a while, concerns around the environmental impact, and the impact to communities. A few states put a halt to all building of new data centres until analysis had been conducted. But on a federal scale this is a much bigger issue for AI and data centres.

The volatility caused by both these elections, and the Brazil election the week prior, have shown the need for diversifiers and safe haven assets.

Safe haven assets are expected to retain value or increase in value during times of market volatility. The assets need to have liquidity to be easily convertible to cash at any time. It should have a use which supports long-term demand for the asset whilst also being unlikely to be replaced. Supply should not outweigh demand. Not every safe haven asset will have all of the characteristics, it’s about the right asset at the right time.

Assets which are typically included in the safe haven asset bucket are gold (and more recently other precious metals like silver and platinum have been considered although they are more volatile themselves than gold), government bonds (typically US treasuries), some defensive stocks and currencies like the US dollar, Swiss franc, and the Japanese yen.

Last week gold was up to nearly $4,100 after it fell over September and October below $4,000. The US dollar fell on the day of the mid-terms against the Swiss franc and the Japanese yen, it rallied a bit but still fallen slightly against the yen, but is roughly flat against the franc. However, when the Middle East conflict escalated in March this year the dollar rallied, so it can have variable outcomes depending on the macro environment. US treasury yields have fallen last week which is a good signal for US treasuries and will have been good for portfolios.

Safe haven assets aren’t the only tool, there are other diversifiers which can be added to portfolios to help with volatile market conditions and depending on economic outlooks. For example, this year, commodities have been a great place to be, particularly energy and agricultural commodities. Energy is a huge concern around the globe currently. The Middle East conflict highlighted the need for energy security whilst also having large impacts on inflation. Brent crude oil rose to $113 again at the end of October, nearly beating the May high of $114. It has fallen slightly now to below $100.

Agricultural commodities have become a central focus too. Again, the Middle East conflict caused concerns over fertiliser supply – the Strait of Hormuz region produces significant amounts of ammonia and urea, which are essential for agriculture fertiliser. Also, around a third of globally traded urea passes through the strait. This will have huge consequences for next years growing cycle. Coupled with a super El Nino currently happening which is likely to also cause food shortages.

A few years ago when inflation started rising, there was a general consensus that it would remain sticky and above the 2% inflation of the past decade. This has proven to be largely right. With more inflation and more volatility in the macro outlook and in underlying stocks it is more important than ever that portfolios should be properly diversified.

Emily Cave – Research Analyst

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