Nicole Elliott from Mizuho made an interesting comment on CNBC Europe yesterday: Anything that can go down 10% in one week cannot be considered a safe haven ... of course I am talking about the Swiss franc and gold.
Both the franc and gold each had big drops (at different times) in August. Not putting too much in these things has been a major point here over the years and these week-long dips serve as microcosms for what can happen. Gold might be working its way back up to $1900, it certainly has bounced and for now the franc is still headed lower but at a flatter trajectory.
The problem with gold in this context is that it is very volatile. Some advise putting 20% in gold which I have never understood because of the potential volatility. I think gold works because it usually has a low correlation to equities. From 1980 to about 2001 it mostly went down as equities went up (low correlation) and since 2001 it has gone up a lot as equities have drifted lower (again low correlation).
Two big issues with the Swiss franc is that it is a very small currency and the run up from early this summer was evident of a buying panic. The currency is small enough that the SNB has tried several times to intervene in the currency market. It did not succeed but it obviously thought it could. Another issue, more of threat that might be on the back burner for now is that the banks are much bigger than the country in a similar vein as Iceland.
A recurring theme here, and it is still valid, is that these sorts of perceived safe haven exposures have fundamental risks and are subject to volatility same as most other holdings in a diversified portfolio. The better way to hide would be small allocations several types of perceived safe havens that hopefully have a relatively low correlation to each other.