Gold and oil sell off dramatically, volatility picks up. Ukraine situation still dire, China trying to contain Omicron. Inflation out of control. The Fed offering a very small 0.25% to battle inflation. Markets are vulnerable to a 'crisis' tipping point.
This is an interesting chart (Chart 1), the white line are the Gold futures, blue is the NASDAQ composite index and the the hollow candles indictor is the U.S. Dollar index. Below is the VIX of the CBOE which are options used to hedge against volatility in the market. Sometimes used as measure of volatile market conditions, which, compared with gold is a correct assertion. Note, gold, within the vertical trend lines and the VIX, both are very much trailing the same applied hedge against risk. It is however the growth stocks i,e speculation trades which is the economies that make up NASDAQ composite that are being hammered the most, which is now in a bear market (collapsed 20%). However, stocks have been bid even with the horrible war in the Ukraine and volatility has not been as extreme as it was when the pandemic hit in 2020.
The Fed is about to increase interest rates at 0.25%, which, although small, should set the scene for more volatility which is already occurring with the oil price (Chart 2). Collapsing from $115 on the 28th February to $97 March 14th is because of two things, 1.China, an net importer of oil, has locked down millions of its citizens due to the COVID variant Omicron. 2. The U.S. Dollar has begun its incline albeit slowly, stuck in a trading range between 2015 and 2022 (Chart 3) with interest rates historically low between 0.12% and 0.08%. It would be hard pressed to see oil and gold begin to decline in any dramatic manner.
But, all eyes on the Ukraine and Russia conflict. As the fog of war has descended, thoughts are with the citizens trapped in Ukrainian cities that are under siege.
AP updates: https://apnews.com/article/russia-ukraine-kyiv-business-global-trade-europe-d3fc8e510956c63a8d7b53efb8700c9e
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