Market Snapshot – Geopolitical Tension Dominates Markets

Stock Markets Correct

It is all about geopolitics today as the clash between North Korea and the USA continues to dominate the market headlines for the second day today. It began yesterday with the North Korean threat to attack Guam but they are generally known to give out such caustic statements once in a while in a bid to make their presence felt. But this time, they have an equally caustic US President to deal with and he launched a tirade of threats. This exchange has caused jitters in the markets which has kept the European stock markets under pressure. The DAX and the FTSE are trading in the red with both having fallen by more than 1% and gold prices have shot up as the funds from the stock markets are being diverted into the gold market. This points to a weak opening for the US stock markets as well.

Gold and Dollar Gain

The investors around the world have turned cautious as the clash between North Korea and the US has escalated. This had led to the pulling out of funds from the stock markets and these funds have been pushed into gold which has helped it to move past the $1270 mark as of this writing and it continues to look ominously strong especially in the light of such strong global risks. This has also helped the dollar in a way as some of the funds find their way into the dollar which is also one of the usual beneficiaries of any peaking in global risk, along with the yen and gold.