Safe haven gold is getting fresh looks from jittery investors as conditions become tense between the United States and embittered Middle Eastern countries as the weekend approaches.
Analyst news site Marketwatch.com and the Associated Press reported on Friday January 3 that crude oil prices climbed and US stock market futures fell on Thursday night following news of the death of one of Iran’s top generals, killed on orders from US President Donald Trump.
Meanwhile, analysts at the New York Times said that in other markets, investments that are considered havens safe from market turmoil, such as gold and currencies like Japan’s yen, strengthened on the news.
MarketWatch quoted Stephen Innes, chief Asia market strategist for AxiTrader as stating, “Equity futures are tanking, gold futures are surging — as the geopolitical risk Index rockets higher.”
He added, “This is more than just bloodying Iran’s nose. This is an aggressive show of force and an outright provocation that could trigger another Middle East war. Indeed we are waking up to a less safe world than it was only hours ago.”
MarketWatch noted that West Texas Intermediate crude for February delivery CLG20, +2.81% and the global benchmark, Brent crude for March delivery BRNH20, +3.15% , each surged immediately following the news.
The gain is similar to the market’s response in mid-September, after a missile attack on Saudi Arabia’s oil facilities.
Marketwatch noted that U.S. stock market futures took a hit as well, with Dow Jones Industrial Average futures YM00, -0.82% and S&P 500 futures ES00, -0.67% and Nasdaq Composite futures NQ00, -0.75% all falling, indicating likely losses in Friday’s trading session.
However, the news analyst site noted, oil producers such as BP BP, +2.68% gained ground.
At midday the New York Times reported that oil prices had jumped about four per cent Friday, and Wall Street opened about one per cent lower, on news that a powerful Iranian military leader had been killed.
The publication noted that the price of Brent oil, the international benchmark, surged in the early hours of Hong Kong trading to nearly $70 a barrel after the Pentagon said President Trump had authorised the airstrike against Maj. Gen. Qassim Suleimani at Baghdad’s airport.
West Texas Intermediate, the American oil benchmark, also rose about four per cent, to nearly $64 a barrel.
On Wall Street the S&P 500 opened about one per cent lower, following global markets. Hong Kong’s Hang Seng lost 0.3 per cent, and Germany’s DAX index was trading 1.7 per cent lower.
Approaching midday in Europe, Brent crude oil reached about $69.20 a barrel.