Markets plunge & gold soars as N.Korea fires missile over Japan
Global stock markets retreated on Tuesday while gold gained on investor concerns over rising tension following the latest North Korea missile launch.
The pan-European STOXX index dropped 1.7 percent to its lowest in six months before rebounding.
The British FTSE100, Germany’s DAX and France's CAC40 indices are more than one percent in the red. Markets in Japan closed 0.45 percent down, and Hong Kong’s Hang Seng fell 0.35 percent. China’s Shanghai Composite was flat, and finished trading 0.08 percent up.
Wall Street opened in red with Dow Jones down nearly 100 points during early Tuesday trading. NASDAQ slid 0.41 percent, while the S&P 500 was 0.34 percent lower.
North Korea fired a missile on Tuesday that flew over Japan and landed in the Pacific about 1,180 km off the Japanese island of Hokkaido.
The strengthening euro has also been the reason for a drop in European equities.
“After weeks of quiet, renewed geopolitical tensions and a soaring euro are combining to cause some impressive moves across markets this morning. We have seen triple-digit losses on the FTSE 100, while in Europe the surge in the euro past $1.20 has resulted in a brutal morning for European equities,” said Chris Beauchamp, chief market analyst at IG.
Gold was up 0.84 percent, trading at $1,326.40 per troy ounce. The demand for physical gold has increased due to the growing dispute between North Korea and the United States.
“We’ve seen a 78 percent increase in financial professions investing in physical gold on the expectation the equity markets and the dollar will continue to slip while the gold price rallies. Physical gold investment from first-time purchasers has increased by 87 percent as they worry about market uncertainty in the face of such volatile world leaders,” said the Pure Gold Company, a London-based physical trader.
