Global Instability Boosts Familiar Havens
Global stock markets have remained unexpectedly healthy despite recent concerns over several geopolitical events, which had threatened to trigger sell-offs across Asian, European and American markets.
The continuing tariff war between the US and China, the US airstrike that killed a top Iranian military commander and the upcoming US Presidential elections conspired to send global stock markets lower. But the resurgence of traditional safe havens for investors have cushioned the losses and even sent some markets back into the black.
Crude Oil And Gold Benefit
Particularly strong, unsurprisingly, was the performance of crude oil – with the events in Iraq sending the commodity up 2.37% to $62.63 per barrel – but fellow safe-haven Gold was also a popular choice, rising 1.5% to $1,548 an ounce.
This is close to its last high in September, and well on the way to the $2000 ceiling, which it may breach as early as this year.
Along with the commodity itself, stocks in many mining companies that specialise in Gold also rose, especially those based in the US and Canada which are expecting particularly strong outputs in 2020.
A third beneficiary of the tension was US government investments and bonds, which also saw a boost.
Whilst none of this movement is especially surprising given the scale of recent global tensions, the fact that even these issues haven’t caused a significant slump in the markets is being taken by many analysts to mean that this bull market isn’t showing any signs of slowing.
Not only does it appear more resilient than many people had predicted, but it also shows signs of returning to further growth in Q1 of 2020 if, as expected, further escalation in the US conflict with Iran fails to materialise.
With news that China’s government will soon step in with a stimulus package to aid its economy, and the increasing chance of a trade deal being signed between the US and China, there is plenty of good news on the horizon to offset the temporary blip caused by the events in Iraq towards the end of last week – and traders can expect to be able to move out of safer havens as Q1 progresses.