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War Drums Beat on Markets

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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War Drums Beat on Markets

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.

To read the rest of this article, click here.

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Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

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