INTERNATIONAL – A tidal wave of risk aversion engulfed financial markets on Wednesday, after Iran launched retaliatory missile strikes against US forces in Iraq.
Asian shares tumbled during early trade, while Gold punched above $1 600 (about R22 776) as escalating tensions in the Middle East fuelled risk aversion and accelerated the flight to safety. Iran’s retaliation has raised fears of a full-blown conflict with the United States and this negative sentiment is poised to weigh on equity markets this week.
There is a lot of uncertainty in the air with markets still in ‘wait and see’ mode until fresh clarity is provided on the US-Iran faceoff.
Markets have stabilised to some degree after the initial burst of volatility with investors taking some reassurance from the absence of US casualties and the measured tone of the official responses. President Trump is expected to make a statement later today in response to the Iranian strikes which should give fresh direction to markets.
Gold turbocharged by risk aversion