Russia's attack on Ukraine sparked volatility and fresh uncertainty in markets on Thursday as investors struggled to gauge the long-term implications of the conflict on prices.
After falling earlier, US stocks rose later in the day, while instruments such as gold and government bonds reversed some of their earlier gains. Oil prices exceeded $100 for the first time since 2014.
Although there is currently uncertainty in the market, it is important to know that in the past the effects of major geopolitical events were usually short-term, especially if the economy was on solid footing.
Impact on markets
Indexes. The Dow40 rose by 91 points to 33.223. That momentum came after the index fell more than 800 points in early trading.
Other major U.S. stock indexes also improved, with the S&P 500 up 1,5% in late trading and the Nasdaq technology index up 3,3%.
Cryptocurrency. Meanwhile, the prices of major cryptocurrencies continued to fall this week as the Russia-Ukraine crisis boiled over and crypto buyers and other investors sought safer havens like the US dollar and gold.
Bitcoin fell in early trading on Thursday, but recovered later in the day. The price of this cryptocurrency increased by 3,2% on Thursday.
Naphtha. Oil prices jumped 7,5%, topping more than $100 a barrel for the first time since 2014, on concerns that the crisis in Eastern Europe could disrupt Russian crude supplies. Russia accounts for about 12% of the world's oil supply and provides about 40% of gas to the European Union. Most of that fuel is delivered by pipeline, including to Ukraine.
The initial reaction of the market was typical and already seen during previous major conflicts. Gold prices jumped to their highest level in more than a year, and the dollar gained more than 1% against other currencies.
This situation on the market causes additional volatility, but also a chance for potential investment. What does this mean in practice? Here are two examples of trades gold and oil:
Gold
Gold price 22.02. was about 1910 dollars; Gold price 24.02. was about 1970 dollars.
This means that in a period of only two days, with an investment of $38,2 on a quantity of 0,02 lots, investors had the opportunity to potentially earn $120.
Naphtha
The price of oil also recorded growth. Two days ago, with a stake of $18,47 at a purchase price of $92,380, by the end of the day you could potentially make a profit of €55,82 (lot 0,01) because the closing price was $97,962.
If you want to trade gold or oil click here.
If you have any questions regarding trading, you can call us on the phone number +382 67 242 242 and we will answer any of your questions for free.
Website: www.limitprime.com/me
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