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PUBLISHED FRI, JAN 3 2020 8:05 AM EST
UPDATED FRI, JAN 3 2020 3:32 PM EST
Yun Li
@YUNLI626
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KEY POINTS
Gold rose more than 1%, inches away from hitting a six-year high reached in September.
The benchmark 10-year Treasury yield had the biggest decline in one month.
The U.S. dollar index popped 0.2%, while the Japanese yen hit a two-month high against the greenback.
Investors flocked to safe assets after a U.S. airstrike ordered by President Trump killed Iran's top general, Qasem Soleimani, in Baghdad.
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Traders work on the floor of the NYSE.
Brendan McDermid | Reuters
Safe-haven assets rallied Friday after the U.S. killing of a top Iranian general sparked fears of a broader conflict that could disrupt energy production and drag down the global economy.
Gold rose 1.5% to $1,551.8 per ounce, inches away from hitting a six-year high reached in September. The benchmark 10-year Treasury yield, which moves inversely with bond prices, tumbled more than 8 basis points to around 1.79%, the biggest decline in one month. The U.S. dollar index popped 0.2%, while the Japanese yen hit a two-month high of 107.92 against the greenback.
Investors flocked to safe assets after the U.S. airstrike ordered by President Donald Trump killed Iran's top general, Qasem Soleimani, in Baghdad. Soleimani had been a key figure in Iranian politics, and his death has raised concerns over a potential retaliation from the Iranian forces.
Iran's foreign minister tweeted that the U.S. bears responsibility for all consequences of its "rogue adventurism," while the Fars News Agency reported that Iran's top security body will meet to discuss Tehran's response.
"It is impossible to know what comes next," Chris Rupkey, chief financial economist at MUFG, said in a note on Friday. "Markets don't even know what they are waiting for to signal the all-clear siren."
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On the flip side, riskier equities sold off Friday with the Dow Jones Industrial Average down as much as 300 points.
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World Politics
Yen, gold and Treasury bonds jump after Trump’s airstrike on Iran’s top military official
Published Fri, Jan 3 20206:43 AM EST
David Reid
@davyreid73
Key Points
Traders moved capital into “safe-haven” assets on Friday morning.
The move is in response to a U.S. airstrike on a top Iranian military commander.
Pentagon said General Qasem Soleimani was killed at Baghdad airport on Friday morning.
Safe haven assets are on the rise following a U.S. airstrike that has killed one of Iran’s most powerful military leaders.
Spot price for gold is testing six-month highs at around $1,546 per ounce, a rise of more than 1% on the session. Silver is higher by almost 1 percent while platinum and palladium have also jumped in value.
The U.S. 10-Year Treasury note also shifted suddenly, falling to its lowest yield in almost three weeks at 1.83%. Unsurprisingly, oil has leapt in value as concern rises over potential supply disruption.
A sudden rush to safer assets came after President Donald Trump ordered a strike on Iran’s General Qasem Soleimani, head of the Iranian Revolutionary Guard’s elite Quds Force.
The Pentagon has confirmed that Soleimani was killed early on Friday by a U.S. airstrike on his convoy at Baghdad airport.
The general’s death marks an escalation in tensions between Tehran and Washington and raises uncertainty over Middle East stability. Iran’s supreme leader, Ayatollah Ali Khamenei has vowed “severe retaliation.”
Japan’s yen, another asset that traders seek in terms of uncertainty, has risen half a percent against the dollar on Friday morning, while the Swiss franc surged to a four-month high versus the U.S.currency.
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Killing of Qasem Soleimani can easily escalate into all-out war, expert says
As capital poured into haven assets, riskier investments into stocks were trimmed.
The pan-European Stoxx 600 slid almost 0.8% by mid-morning in London. Most sectors traded lower except oil and gas, which surged on the back of the U.S. airstrike.
In London, the FTSE 100 slipped around four tenths of one percent, the index somewhat cushioned by rises to major energy stocks such as BP and Royal Dutch Shell.
Other losses were seen in emerging market currencies, such as the South African rand and Indian rupee.