The latest soundtrack in the financial markets can best be described as the beating of war drums with Syria. Since tensions in that Middle East nation have escalated to the point where U.S. military action now is almost a certainty, the price of assets such as oil, gold, Treasury bonds and equities all have been materially affected.
Take oil, for example. A chart of this shows that big spike higher in the iPath S&P GSCI Crude Oil TR Index ETN (OIL) to multi-year highs, as energy traders react to the potential of a supply constriction from the Middle East if the war in Syria morphs into a much more bellicose regional conflict.
Meanwhile, traditional safe-haven assets such as gold and Treasury bonds both have been bid up as a result of the Syrian tensions. Charts of the SPDR Gold Trust (GLD) and the iShares Barclays 20+ Year Treasury Bond (TLT) clearly show the flight to quality taking place in these two “risk off” trades.
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