What is "flight-to-quality"

A flight-to-quality is a financial market phenomenon occurring when investors sell what they perceive to be higher- risk investments and purchase safer investments, such as US Treasuries or gold. This is considered a sign of fear in the marketplace, as investors seek less risk in exchange for lower profits.

Flight-to-quality is usually accompanied by an increase in demand for assets that are government-backed and a decline in demand for assets backed by private agents.