As a possible repeat of the US debt ceiling crisis couples with the possibility of military actions in the Middle East, investors are buying heavily into gold, and the price is shooting up in kind. The market as well has had a rough day, with the S&P 500 down 1.58 percent.
The price of the precious metal has shot up nearly two percent an ounce. Gold often spikes on worrying developments domestically and abroad, and with bad news on both fronts, has officially entered a bull market.
Since the early summer the metal has gained 20 percent, spurred by bad news on both international and domestic fronts. On the international front, investors fear that the US will engage more heavily in the Syrian conflict that has raged all month, and possibly draw America into a conflict proportional to the Iraq War. Domestically, investors have become concerned that the debt ceiling will once again become an issue, and worry that the newfound stability of the US economy will falter.
Gold is trading at $1,415.70 an ounce. In late June it had dropped as low as $1,180.
Unsurprisingly, gold and market bear funds are performing well on the troublesome news. The popular iPath S&P 500 VIX Short-Term Futures ETN (VXX) has spiked 7.59 percent to hit $16.45 a share. Direxion Daily Small Cap Bear 3X Shares ($TZA) is up 6.78 percent to hit $27.41 a share. Direxion Daily Financial Bear 3X Shares ($FAZ) is up 6.13 percent to hit $32.73 a share.
SPR Gold Trust ($GLD) is up 1.11 percent to hit $136.96 a share. iShares Gold Trust ($IAU) is up 1.1 percent to hit $13.37 a share.
Sometimes leveraged ETFs don’t correlate directly. DIrexion Daily Gold Miners Bull 3X Shares ($NUGT) for instance is actually down 6.17 percent on the day to hit $91.50.
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