Trouble in Ukraine and China Sparks Haven Demand

Chicago (Mar 12)  Russian troops are massing along Ukraine’s eastern border. Crimea is nearly annexed as a Russian territory. Stocks in Germany and France lost more than 1% as traders realize that, yes, geopolitics can matter for financial markets.

Meanwhile, in Asia, more investors are noticing China’s slowing economic growth and its shadow-banking crisis. The price of copper is down again as traders fear defaults after the country experienced its first domestic bond defaul.

What does that spell for gold? After nearing a fourth-month high on Tuesday, a gain, naturally.

Investors Wednesday are seeking out investments tied to the metal, which, a 28% 2013 slump notwithstanding, often serves as a safety play. The most actively traded gold futures contract is ahead by 1.3% to $1,365 per ounce in New York.

SPDR Gold Trust (GLD) is ahead by 1.3% in early trading, while Market Vectors Gold Miners ETF (GDX) is ahead by 1.5%. The leveraged Direxion Daily Gold Miners Bull 3X Shares (NUGT) and Direxion Daily Gold Miners Bear 3X Shares (DUST) are moving by nearly 5% apiece and iShares Silver Trust (SLV) is rising 1.1%.

Source: Barrons