South Korean Ship Sinks Near Disputed Border with North Korea (EWY, GLD, SLV)

A South Korean naval vessel carrying 100 sailors sank late Friday near the disputed maritime border in the Yellow sea that the country shares with North Korea. A rescue mission to save the sailors is underway.

According to the South Korean Yonhap news agency, a second naval ship later fired at a vessel that was not identified.

There has been no official announcement as to what cause the explosion which led to the ship sinking at 10:45 p.m. local time, but Korean TV networks are speculating that a torpedo struck the vessel.

There has been an emergency meeting of senior security called by South Korean President Lee Myung-bak at the Blue House.

This would mark the second time in five months that the two nations have traded fired if it is confirmed that North Korea fired on the ship Friday. Last November, patrol boats from the two countries had a two-minute gun fight which resulted in little damage to either nation’s vessel.

Before that incident the two countries had last had a conflict at sea in June 2002, when the maritime border was crossed by a North Korean patrol boat which fired upon two South Korean boats, resulting in the sinking of one vessel and the death of six South Korean sailors.

The two countries have shared the maritime border since it was established following a ceasefire that ended the Korean war in 1953, but has since been contested by North Korea.

ETFs Moving On the News:
iShares MSCI South Korea Index (NYSE: EWY) -0.9%
iShares Silver Trust (NYSE: SLV) +1.2%
SPDR Gold Shares (NYSE: GLD) +1%

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