Everything Crashes, Gold Survives
Following the Dow’s historic 1,000+ point Monday plunge, global stocks responded in kind, with heavy selling in Asia and Europe on Tuesday. Cryptocurrencies continue to crash as well, but gold is holding steady.
Dow Bounce: After opening down more than 500 points, the Dow Jones industrial average was up more than 250 points in early morning trading. While another 1,000 point drop is unlikely, 2018 is shaping up to be a volatile year for stocks. The decade-long bull market, at the very least, has been put on hold.
Global Contagion: Exchanges around the world crashed in sympathy with U.S. losses. Tokyo's Nikkei 225 stock average lost 4.7%, the Shanghai Composite index closed 3.4% lower, and Hong Kong's Hang Seng dropped 5.1%. Australia's benchmark S&P ASX 200 slid 3.2%, and South Korea's Kospi declined 1.5%. In Europe, the FTSE 100 index of leading British shares took a 1.9% hit, the CAC 40 in France fell 2.4%, and Germany's DAX lost 2%.
Crypto Crash: In addition to stocks, cryptocurrencies collapsed as well. All told, they’ve lost two-thirds of their value in just over a month. Bitcoin, the leading virtual currency, has tumbled from nearly $20,000 per coin on Dec. 17, 2017, to just over $6,000 per coin.
Precious Metals: Gold has edged up amid the market turmoil, but failed to take off convincingly. It was capped by gains in the dollar, which resulted from the overseas market collapse. Palladium, however, continues to hover near record highs. The metal is benefiting from a generally weaker dollar, but also surging demand from electric vehicles.
To your wealth,
–Outsider Club Research Staff
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