Apparently the Malaysian Airline plane that crashed in Ukrainian territory was shot down by persons unknown at this point.
This signaled the precious metals markets to go higher. It also prompted U.S. Treasuries to hit higher prices/lower yields. Oil also zoomed.
Indicating that Russia has let the situation get out of their control, that countries two major airlines, Transaero and Aeroflot, canceled flights in the region as did a host of other international carriers. (Of course, this could be a case of the Russians wiping their fingerprints off the murder weapon, so to speak.
As the Canadian Leader-Post said today on its website:
"Traders were already cautious after the U.S. announced broader sanctions against Russia, targeting two major energy firms, a pair of powerful financial institutions, eight weapons firms and four individuals. The increased U.S. economic pressure is designed to end the insurgency in eastern Ukraine that is widely believed to be backed by the Kremlin."
The Russians better hope that the missile was not supplied by them. That would certainly lead to the E.U., spineless till now, jumping on board the harsher sanctions regimen.
This kind of geopolitical tension naturally leads observers to focus on other hotspot. And that helped gold and silver too. The other hotspot is the Gaza border where Israel has commenced its expected ground offensive.
Additionally, the pace of homebuilding in the U.S. and the issuance of new permits slowed significantly in June. That data drove the dollar the dollar down modestly.
All of these factors weighed on equities as money stampeded to safety born of disaster.
A word of warning, though. One-off events like the downing of the airliner tend to fade quickly from the minds of investors and traders. Be aware of this instant amnesia factor.
As always, wishing you good trading,
Gary S. Wagner - Executive Producer