Gold, defence firms and the Vix are all up after Donald Trump's North Korea threats

Emma Haslett
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Trump ramped up rhetoric even further this afternoon. (Source: Getty)

We may all be facing the threat of nuclear extinction, but some investors were making lemonade out of life's lemons by piling into safe haven assets, pushing up the price of gold.

The Vix index, which measures market volatility, ticked up to 12.41, its highest in over a month, as Trump ramped the rhetoric up even further following his "fire and fury" comment last night.

Major stock indices all edged lower, with the FTSE 100 dropping 0.6 per cent in mid-afternoon trading, while the Cac 40 fell 1.6 per cent and the Dax fell 1.3 per cent. Across the pond, both the Dow Jones index and the S&P 500 edged 0.3 per cent lower in the first minutes of trading.

Meanwhile, the Swiss franc rose 0.9 per cent against the dollar, to $1.0361.

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Gold sparkles

Gold futures rose 1.22 per cent to $1,278, pushing London-listed gold miners higher. Fresnillo and Randgold Resources led the FTSE 100, rising five per cent and 3.7 per cent respectively, while Acacia Mining shot to the top of the FSTE 250, rising 9.4 per cent.

Elsewhere, defence contractors also rose, with BAE systems creeping up 0.7 per cent, while FTSE 250-listed Qinetiq rose 1.1 per cent.

"Of course, this could end up being a flash in the pan, so we don’t think that fund managers and traders are going to rush into changing their portfolio allocations just yet, they will want to see how things play out in the coming days," pointed out Kathleen Brooks, research director at City Index.

"However, if the rhetoric does ramp up, even without actual nuclear follow through, this could spook the market and make it hard for stock indices to rally into late summer due to the fears for global trade and global growth."

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