Risk Off The Menu As Gold Jumps And Stocks Plunge

Today looked set to be a normal, uneventful, day in the financial markets, with the economic calendar showing no major data releases.

The volatility index had fallen back after rising somewhat sharply at the start of the week. Stocks were drifting higher, gold lower and oil sideways. And then BAM! All of a sudden, stocks plunged and gold shot higher as traders sought safety in the precious metal. It is not clear what caused this sudden shock to the system, but it serves as a reminder about the dangers of complacency – especially for the bulls in the case of stocks and the bears in the case of precious metals. Perhaps the risk off trade is due to a combination of factors, ranging from worries about the withdrawal of Fed's QE stimulus programme to threats of terrorist attacks, with Iraq's new Premier Haider al-Abadi today warning that the IS may be planning attacks on America and France. On top of this, reports that Russia may be planning to freeze foreign assets in retaliation to Western sanctions, is also weighing on the sentiment.

Risk Off The Menu As Gold Jumps And Stocks Plunge


Markets are red

And is that a top in place?