Gold surges, stocks stumble as Ukraine crisis deepens

  • US says war seems imminent in Ukraine
  • Oil prices weaken after Iran nuclear talks
  • Gold hits new eight-month high
  • Stocks slide amid growing investor unease
  • >Chart: Overall asset performance

NEW YORK, Feb 17 (Reuters) – The price of gold hit an eight-month high and safe-haven debt rose on Thursday after U.S. President Joe Biden said there was every indication Russia was planning to attack the Ukraine, while Moscow accused Washington of ignoring its security. requests.

A gauge of global stocks fell more than 1% despite strong corporate earnings in Europe as the stalemate over Ukraine deepened. Russian-backed separatists and Ukrainian forces have accused each other of firing shells across a ceasefire line as Britain said Russia was seeking to fabricate a pretext to invade. Read more

In a sign of growing concern over Ukraine, US Secretary of State Antony Blinken told the UN Security Council it was “a time of peril” for life and the safety of millions of people regarding Russia’s potential invasion of Ukraine. Russia denies planning to invade its neighbour.

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U.S. and German government bond yields fell and oil tumbled as talks entered their final stages to resuscitate a 2015 nuclear deal that would see Iran resume oil exports to clients such as South Korea. Losses were capped by growing tension between major energy exporter Russia and the West.

Investors were already eyeing the long weekend with Monday a U.S. holiday when markets will be closed, said Marc Chandler, chief market strategist at Bannockburn Global Forex.

“As a market player, you don’t have the incentive to fight the risky mood before the weekend when anything can happen,” Chandler said.

The pan-European STOXX 600 index (.STOXX) fell 0.74% while the MSCI gauge of stocks across the world (.MIWD00000PUS) lost 0.85%.

On Wall Street, the Dow Jones Industrial Average (.DJI) fell 1.19%, the S&P 500 (.SPX) lost 1.18% and the Nasdaq Composite (.IXIC) fell 1.47%.

MSCI’s broadest Asia-Pacific equity index (.MIAP00000PUS) rose 0.15%.

Worries over a super-hawkish rate-tightening campaign by the Federal Reserve eased overnight after minutes from its latest policy meeting signaled a measured, even dovish stance. Read more

Ukraine concerns prompted investors to buy government debt. Yields on US 10-year Treasuries fell 8.2 basis points to 1.963%, while yields on Germany’s 10-year government bonds slipped 0.2 basis points to 0.229 %.

The Russian-Ukrainian crisis has baffled investors who also need to watch the Fed and other central banks’ efforts to fight soaring global inflation.

“There’s a lot of confusion right now and everybody’s crystal ball is pretty cloudy,” said George Mateyo, chief investment officer at Key Private Bank, speaking both about Ukraine and how the Fed could tighten its monetary policy.

The U.S. economy has weathered the impact of COVID-19 on the economy well, with GDP and corporate profits at record highs, which bodes well for the market, he said.

“It will be a tough year, but not a disastrous year,” Mateyo said. “Expect some volatility this year, but don’t completely give up risk, don’t be super defensive. There are a lot of missed opportunities in the market.”

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

gold price

Oil prices fell more than 2% before easing. U.S. crude futures fell 1.56% to $92.20 a barrel and Brent to $93.30, down 1.59% on the day.

The dollar, also seen as a safe haven, initially appreciated against most currencies, but the gains dwindled and the greenback then fell slightly – a sign that investors were not yet panicking over the tensions Russian-Ukrainian.

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

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

The euro was down 0.06% at $1.1366.

Bitcoin last fell 4.62% to $42,047.23.

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Reporting by Herbert Lash, additional reporting by Tommy Wilkes in London, Kevin Buckland and Selena Li in Tokyo; Editing by Kim Coghill, Kirsten Donovan and Barbara Lewis

Our standards: The Thomson Reuters Trust Principles.

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