How could the Pakistani political crisis impact the U.S. economy and gold?
“Gold and government bond prices rose while U.S. stocks slid on Thursday as news of the assassination of Pakistani opposition leader Benazir Bhutto, combined with mostly weak U.S. economic data, increased investors' demand for safe-haven assets.
Some analysts said the shock of the Bhutto news triggered a classic flight of capital to assets deemed as safe havens in times of geopolitical stress. Bhutto's death at a political rally in Rawalpindi could spark regional instability and civil unrest within Pakistan.
Gold rallied to a one-month high, up $6.35, or about 0.7 percent, at $830.65 an ounce.
The benchmark 10-year U.S. Treasury note shot up 14/32 in price, with its yield at 4.23 percent, down from 4.28 percent late on Wednesday. Euro-zone government bond prices also rose after the Bhutto news and a stream of U.S. data, paring earlier losses to standing slightly down on the day.
U.S. crude oil futures soared above $97 a barrel after the latest government inventory data showed a steep drop in crude stockpiles, while stocks sold off sharply and the dollar sank against the euro.
New orders for U.S. durable goods, which are long-lasting U.S.-made manufactured goods such as cars, refrigerators and washing machines, rose by a much less-than-expected 0.1 percent during November.
In contrast, an index of U.S. consumer confidence unexpectedly rose in December, and as a result, U.S. Treasury bonds pared some gains from the morning's highs.”