World Politics

Yen, gold and Treasury bonds jump after Trump's airstrike on Iran's top military official

Key Points
  • Traders moved capital into "safe-haven" assets on Friday morning.
  • The move is in response to a U.S. airstrike on a top Iranian military commander.
  • Pentagon said General Qasem Soleimani was killed at Baghdad airport on Friday morning. 

Safe haven assets are on the rise following a U.S. airstrike that has killed one of Iran’s most powerful military leaders.

Spot price for gold is testing six-month highs at around $1,546 per ounce, a rise of more than 1% on the session. Silver is higher by almost 1 percent while platinum and palladium have also jumped in value.

The U.S. 10-Year Treasury note also shifted suddenly, falling to its lowest yield in almost three weeks at 1.83%. Unsurprisingly, oil has leapt in value as concern rises over potential supply disruption.

A sudden rush to safer assets came after President Donald Trump ordered a strike on Iran's General Qasem Soleimani, head of the Iranian Revolutionary Guard's elite Quds Force.

The Pentagon has confirmed that Soleimani was killed early on Friday by a U.S. airstrike on his convoy at Baghdad airport.

The general's death marks an escalation in tensions between Tehran and Washington and raises uncertainty over Middle East stability. Iran’s supreme leader, Ayatollah Ali Khamenei has vowed “severe retaliation.”

Japan’s yen, another asset that traders seek in terms of uncertainty, has risen half a percent against the dollar on Friday morning, while the Swiss franc surged to a four-month high versus the U.S.currency.

Killing of Qasem Soleimani can easily escalate into all-out war, expert says

As capital poured into haven assets, riskier investments into stocks were trimmed.

The pan-European Stoxx 600 slid almost 0.8% by mid-morning in London. Most sectors traded lower except oil and gas, which surged on the back of the U.S. airstrike.

In London, the FTSE 100 slipped around four tenths of one percent, the index somewhat cushioned by rises to major energy stocks such as BP and Royal Dutch Shell.

Other losses were seen in emerging market currencies, such as the South African rand and Indian rupee.