October 3, 2022

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Gold jumps, stocks stumble as Ukraine crisis deepens

Gold jumps, stocks stumble as Ukraine crisis deepens
  • US says war appears imminent in Ukraine
  • Oil prices fall in wake of Iran nuclear deal talks
  • Gold hits eight-month high
  • Stocks fall as investors grow anxious
  • > Graphic: Global Asset Performance

NEW YORK (Reuters) – Gold prices jumped to an eight-month high and safe haven debt rose on Thursday after U.S. President Joe Biden said there was every indication that Russia was planning to attack Ukraine while Moscow accused Washington of ignoring its security. stimulate.

A gauge of global stocks fell more than 1% despite solid corporate earnings in Europe as the standoff over Ukraine deepened. Russian-backed separatists and Ukrainian forces accused each other of firing shells across the ceasefire line, while Britain said Russia was trying to create a pretext for the invasion. Read more

In a sign of growing concern about Ukraine, US Secretary of State Anthony Blinken told the UN Security Council that this was a “moment of danger” for the lives and safety of millions of people in connection with Russia’s possible invasion of Ukraine. Russia denies planning to invade its neighbour.

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US and German government bond yields fell, and oil tumbled as talks entered their final stages to revive the 2015 nuclear deal that would allow Iran to resume oil exports to clients such as South Korea. The losses culminated in growing tension between major energy exporter Russia and the West.

Mark Chandler, chief market analyst at Bannockburn Global Forex, said investors were already looking towards a long weekend with Monday a holiday in the US as markets will be closed.

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“You as a market participant are not incentivized to fight the risk aversion mood before the weekend when anything can happen,” Chandler said.

Pan-European STOXX 600 Index (.stoxx) It fell 0.74% while the MSCI gauge of stocks fell worldwide (.MIWD00000PUS) fall 0.85%.

On Wall Street, the Dow Jones Industrial Average (.DJI) The S&P 500 is down 1.19%. (.SPX) Lost 1.18% and the Nasdaq Composite Index (nineteenth) It fell 1.47%.

MSCI Asia’s broadest index of Asia Pacific shares (.MIAP00000PUS.) It gained 0.15%.

Concerns about an ultra-hawkish Fed rate tightening campaign eased overnight after minutes from the latest policy meeting indicated a measured and dovish stance. Read more

Ukraine’s concerns led to investors buying up government debt. The US 10-year Treasury yield fell 8.2 basis points to 1.963%, while the German 10-year government bond yield fell 0.2 basis points to 0.229%.

The Russia-Ukraine crisis has alarmed investors who also have to monitor the Federal Reserve and other central banks’ efforts to fight rising global inflation.

“There is a lot of confusion right now and everyone’s crystal ball is very cloudy,” said George Mathieu, chief investment officer at Key Private Bank, speaking about Ukraine and how the Federal Reserve could tighten monetary policy.

He said the US economy has weathered the COVID-19 blow to the economy well, with GDP and corporate profits at peak levels, which bodes well for the market.

“It will be a challenging year, but it will not be a terrible year,” Mathieu said. “Expect some volatility this year, but don’t give up risk completely, and don’t get too defensive. There are a lot of missed opportunities within the market.”

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Spot gold added 1.5% to $1,895.77 an ounce after rising near the key $1,900 mark.

gold price

Oil prices fell more than 2% before pulling back. US crude futures fell 1.56% to $92.20 a barrel, and Brent crude was $93.30, down 1.59% on the day.

The dollar, which is also considered a safe haven, initially rose against most currencies, but the gains slipped and the dollar subsequently fell marginally – a sign that investors were not yet afraid of tensions between Russia and Ukraine.

However, the Japanese yen, a currency that investors often buy as a safe haven, hit its strongest level since February 7.

The dollar index fell 0.058% as the yen rose 0.42% to 114.98 per dollar.

The euro fell 0.06% to $1.1366.

Bitcoin was last down 4.62% to $42,047.23.

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Additional reporting by Herbert Lash, Tommy Wilkes in London, Kevin Buckland and Selina Lee in Tokyo; Editing by Kim Coogle, Kirsten Donovan and Barbara Lewis

Our criteria: Thomson Reuters Trust Principles.