Geopolitical tensions rise as gold prices fall after the Fed meeting. Kashmir attack, missile launches, and US policy shifts keep investors cautious.
Kashmir Attack Shocks Markets, Gold Slides After Fed Meeting
May 8, 2025 — Global markets opened under pressure today as escalating geopolitical risks shook investor sentiment. Meanwhile, the Federal Reserve’s cautious stance continues to weigh on gold prices, which dropped sharply. Let’s break down the major developments that are shaping today’s financial landscape with LiveTrade Pro.
1. Kashmir Terror Attack: India-Pakistan Tensions Escalate
A brutal shooting targeting tourists in Kashmir has left at least 9 dead. The attack has reignited long-standing tensions between India and Pakistan, with India blaming militant groups allegedly backed by Pakistan. The incident has raised fears of military retaliation and added a new layer of volatility to the already fragile South Asian region.
2. Trump Offers Mediation in South Asia Conflict
In response to the escalating violence, President Donald Trump announced that the United States is prepared to act as a mediator between India and Pakistan. However, analysts remain skeptical, noting that neither side has shown signs of compromise. Trump’s approach may serve more as a strategic diplomatic gesture than a realistic breakthrough.
3. North Korea Fires Multiple Short-Range Ballistic Missiles
South Korea has confirmed that North Korea launched four short-range ballistic missiles into the Sea of Japan. The move comes just days after the conclusion of US-South Korea joint military drills and signals continued defiance from Pyongyang. Investors in the Asia-Pacific region are responding cautiously.
4. Putin Calls for Ceasefire in Ukraine on Victory Day
Speaking during the Victory Day parade in Moscow, Russian President Vladimir Putin called for a temporary ceasefire in Ukraine. Despite the symbolic gesture, clashes continue in eastern regions. The proposed ceasefire is seen more as a diplomatic posture than a viable resolution.
5. US Pushes for 21-Day Ceasefire in Gaza
Amid ongoing civilian casualties in Gaza, the US is promoting a 21-day ceasefire between Israel and Hamas. While international pressure builds, there’s no confirmation yet that either side will agree. The humanitarian situation remains dire, contributing to regional instability.
Market Response: Gold, Forex, and Fed Policy in Focus
6. Fed Keeps Rates Unchanged, Investors Disappointed
The Federal Reserve’s latest policy meeting ended with no concrete signals on rate cuts. Chair Powell emphasized the need for more data before any move, disappointing markets that had priced in a mid-year cut. However, Wall Street still ended in positive territory, with moderate gains across major indices.
7. Gold Drops Below $2,280 After Fed Meeting
Following the Fed’s indecision, global gold prices fell sharply. Spot gold is now trading below $2,280/oz, as short-term investor optimism fades.
In Vietnam, SJC gold prices also declined by 300,000 VND/tael this morning, bringing local gold closer to 69 million VND per tael, in line with global trends.
8. USD and CNY Slip as Markets Reopen
The US dollar and Chinese yuan both softened slightly in early trading, reflecting a cautious global outlook. In Vietnam, exchange rates mirrored this movement, with the central bank adjusting reference rates downward.
Uncertainty Dominates Global Markets
May 8, 2025, highlights the deep link between geopolitics and financial markets. From a terror attack in Kashmir and missile launches in East Asia, to Putin’s symbolic peace call and Trump’s diplomatic maneuvers, investors are navigating through a minefield of risks.
Meanwhile, the Fed’s stance has removed a key short-term support for gold, driving a correction across safe-haven assets. Currency and equity markets remain stable but cautious.
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