Geopolitical tensions have reignited a flight to safe assets, with gold surging to its largest weekly gain in over a year, climbing 4.5% to $2,688 an ounce. The escalation stems from Russia’s deployment of a hypersonic ballistic missile against Ukraine, a stark response to Western support for Kyiv. Investors, unnerved by the rising risk of nuclear confrontation, flocked to haven investments, while European gas prices surged to a one-year high.
Meanwhile, Asian markets saw mixed movements. Tech stocks rebounded, buoyed by Nvidia’s record-breaking U.S. performance, with indexes in Taiwan and South Korea posting gains. However, Chinese markets lagged due to disappointing earnings reports, with the CSI300 and Hang Seng indexes falling 1.6% and 1.75%, respectively. The euro continued to struggle under the weight of Europe’s economic and political challenges, nearing a 2023 low against the dollar at $1.0469.
Bitcoin teeters on the edge of breaking the unprecedented $100,000 mark despite broader risk aversion. The cryptocurrency's resilience reflects its appeal as a hedge in turbulent times. Simultaneously, global oil prices climbed, driven by concerns over supply disruptions as the conflict in Ukraine intensifies. Brent crude reached a two-week high at $74.44 a barrel, continuing a weekly rise of 4.5%.
Amid these developments, Adani Group’s stocks and bonds remained under pressure after its chairman, Gautam Adani, faced U.S. fraud indictments. The company’s financial troubles are contributing to broader unease in Asian markets. Japan reported sustained inflation above its 2% target, fueling speculation of an imminent rate hike by the Bank of Japan, which has added volatility to the yen.
With the dollar index hitting a 13-month high and Treasury yields steady, market attention is shifting to potential U.S. Federal Reserve moves, with chances of a rate cut dwindling. Analysts warn of a challenging road ahead for the euro, battered by tariffs, political instability, and economic slowdown. Meanwhile, the ongoing Ukraine war and its implications for global markets continue to dominate investor sentiment.
