European and Asian stock markets tumbled today followed Wall Street’s steep decline last Friday. The bear sentiment was spurred on by a series of ugly economic and earning’s reports from the US, which have ramped up fears that the US is destined for recession.

According to AP: “The UK’s benchmark FTSE 100 fell 1.3 percent to 5,808.1, while Germany’s DAX Index declined 1.5 percent to 6,652.08. France’s CAC 40 slipped 1.5 percent to 4,717.57.

“In Asia, Japan’s benchmark Nikkei 225 index plunged 4.5 percent to close at 12,992.18. Markets in Hong Kong, South Korea, India and Australia also fell sharply, but shares in mainland China advanced.”

Bad news for stock buffs is good news for gold bugs.

“All those dollars that were sitting in stocks and derivative assets are relocating to Goldville,” says Australian mining and resource stocks specialist Al Johnson.

“It’s investment demand at work. And that leaves the gold price open for both correction, and further gain. The companies best placed to pick up the gains are probably gold juniors.”