The S&P/ASX 200 Index (ASX: XJO) is off to a rough start, down 0.9% in morning trade, having earlier posted losses of more than 1%.
This comes following hefty selloffs in US and European markets yesterday (overnight Aussie time).
As with overseas markets, the ASX 200 is under pressure as investors fret over the possible outbreak of a shooting war between Russia and Ukraine.
Russian officials firmly deny any plans to invade neighbouring Ukraine. However, United States authorities continue to sound the alarm, saying Russian forces might concoct a pretext to invade any day now.
Peter Essele is head of portfolio management at Commonwealth Financial Network. Commenting on the broader market selloff, Essele said (quoted by Bloomberg):
Investors, wary of any bad news, have been unable to maintain positive momentum in equity markets across the globe as geopolitical risks dominate headlines. A further escalation of tensions in the near term could roil markets due to the potential impact on a tenuous global supply chain, particularly as the Fed prepares for its first-rate hike in years. A perfect storm may be on the horizon if calmer heads don't prevail.
While ASX 200 investors are clearly jittery today, some shares are shining brightly amid the turmoil.
Yep, we're talking about gold shares.
ASX 200 gold shares shining brightly
With rising global uncertainty, investors are turning to gold as a classic haven asset.
Witness the 3.1% gain in the S&P/ASX All Ordinaries Gold Index (ASX: XGD) today.
Now that index includes a number of gold miners not included in the ASX 200.
So how are ASX 200 gold shares performing?
Well, the Newcrest Mining Ltd (ASX: NCM) share price is up 3.2%.
Evolution Mining Ltd (ASX: EVN) shares are up 3.7%.
And the Northern Star Resources Ltd (ASX: NST) share price is up 4.8%.
What's driving the rally?
As risk assets selloff, investors are increasingly looking to gold as a store of value during a time of increasing geopolitical uncertainty.
Gold is currently trading for US$1,900 per troy ounce. That's the highest price since June.
As recently as 28 January that same ounce was worth US$1,791, meaning a 6% lift in the price of bullion in just 6 weeks.
And when gold lifts off, the ASX 200 gold shares that dig the yellow metal from the earth tend to follow it higher.
