News reports that rogue state North Korea sent a missile over Japan this morning have led investors to hit the sell button across global stock markets today, including on the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO).
Blue-chip shares like Commonwealth Bank of Australia (ASX: CBA), Insurance Australia Group Ltd (ASX: IAG) and Woodside Petroleum Limited (ASX: WPL) are down as investors worry about the prospect of war on the Korean peninsular.
Any sort of major global war will lead investors to shun risk assets in favour of assets like gold that represent a store of value, which is why the gold price is up to US$1,321 an ounce at the time of writing and closing in on its 52-week high of US$1,327.72 an ounce.
As a result, Australian gold miners like Northern Star Resources Ltd (ASX: NST), Newcrest Mining Limited (ASX: NCM) and Evolution Mining Ltd (ASX: EVN) are all up between 1%-3% on a day when the general stock market is in reverse.
If you're convinced a war in Korea is in the works you might want to buy some gold miners, or even gold itself as some insurance against equity markets plunging.
Gold is likely to go gangbusters if the worst does happen in Korea, with major powers the U.S. and China likely to be involved in any conflict.
As such the Australian dollar could also dive if war does occur which is another consideration investors might want to prepare themselves for.
The news that a missile has been fired over Japan certainly lifts the stakes for markets generally, although it's worth noting that tensions have existed on the Korean peninsular for more than 50 years with no hot war as yet.
