Stock markets are in “meltdown” today, with an oil price war striking another blow to stocks in what is being called “Black Monday” by analysts. Gold was pushed to a seven-year high of $1,702 per ounce this morning on the news.

Oil giants in Saudi Arabia had intended to strike a deal with Russia to limit oil supply, on the back of falling demand due to the ongoing coronavirus outbreak. Russia’s refusal to strike a deal however prompted a quick response from the Saudi’s; promising to flood the market with oil and drive prices down. Oil slumped 30% as trade opened, knocking energy stocks down further.

The loss in oil positions is also worsening stock positions, with some investors selling stocks at heavy losses to meet margin calls on oil. As mentioned in our previous article, this has also impacted the gold price, with some investors forced to sell their gold to cover their losses in stocks.

The UK’s FTSE 100 opened 8.5% down this morning, and has only recovered slightly – down 7.32% at the time of writing. This is the lowest the FTSE has been since 2016, and puts the index 20% down from its recent peak, meaning it is close to being classed in a bear market. UK two-year bond yields also turned negative over the weekend, as investors turned to safe haven assets to escape the sell-off.

Europe’s overall STOXX 600 fell 6%, while Italy’s MIB fell 10%. As the centre of coronavirus in Europe, Italy is facing the worst of the virus outside of China, with 16 million people quarantined. As of this morning there were 7,375 cases (up 25% in just one day) and 366 deaths.

America is also suffering its worst performance since the financial crisis in 2008. US futures were locked out – known as a “limit down” – today after falling 5% overnight. The S&P 500 was then halted for 15 minutes this afternoon after falling 7% on opening. The selloff continued however upon reopening, and all three major US indexes are down 7.29% or worse.

Gold’s peak in Dollars this morning of $1,702.98 per ounce continues to demonstrate the high demand for gold as a safe haven asset. The gains have been somewhat muted in Sterling by a strengthening Pound, but the precious metal still hit £1,304.19 per ounce this morning, nearing the recent all-time high.

With the new oil price war adding to already growing fears of recession as a result of the coronavirus, it looks like there is still plenty of room for more demand for gold in the short-term, and further price gains as a result.