Gold nears 6-year high, other safe havens like bonds and dollar rise after US kills Iran general

Traders work on the floor of the NYSE.

Brendan McDermid | Reuters

Safe-haven assets rallied in unison on Friday after the U.S. killing of a top Iranian general in Iraq sparked a broad flight to safety move on fears of a broader conflict that disrupts energy production and drags down the global economy.

Gold rose more than 1% to $1,547.19 per ounce, inches away from hitting a six-year high reached in September. The benchmark 10-year Treasury yield, which moves inversely with bond prices, tumbled more than six basis points to around 1.82%, the biggest decline in one month. The U.S. dollar index popped 0.2%, while the Japanese yen hit a two-month high of 107.92 against the greenback.

Investors flocked to safe assets after a U.S. airstrike ordered by President Donald Trump killed a top Iranian general Qasem Soleimani in Baghdad. Soleimani had been a key figure in Iranian politics and his death has raised concerns over a potential retaliation from the Iranian forces.

Iran’s Foreign Minister has tweeted that the U.S. bears responsibility for all consequences of its “rogue adventurism,” while Fars News Agency reported a spokesman as saying that Iran’s top security body will meet to discuss Tehran’s response.

“It is impossible to know what comes next,” Chris Rupkey, chief financial economist at MUFG, said in a note on Friday. “Markets don’t even know what they are waiting for to signal the all-clear siren.”

On the other hand, riskier equities sold off on Friday with the Dow Jones Industrial Average futures down 300 points.

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