Oil and gold prices climbed on Wednesday and regional shares edged higher as geopolitical tensions mounted ahead of key US inflation data, Reuters reported.
US crude rose 0.89 percent to $83.94 a barrel and Brent advanced 0.78 percent to $89.60. Both benchmarks settled more than a dollar higher on Tuesday, their highest closes since July 31, after jumping about 5 percent on Monday.
Spot gold gained 0.46 percent to $4,387.03 an ounce. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, while Japan’s Nikkei traded flat as the market reopened after a holiday. The yen was mostly flat against the dollar, having unwound much of its gains after rare joint intervention by Japan and the United States.
Shipping attacks and a missile launch
The United States and Yemen’s Iran-aligned Houthis reported separate attacks on shipping. Four crew members of an Egyptian-owned ship were killed in a Houthi attack on Tuesday, Yemen’s transport ministry said, while the US military said it struck a container ship attempting to sail towards an Iranian port.
Asian markets were also unsettled by an early morning ballistic missile launch by North Korea, days ahead of major joint military exercises by Seoul and Washington.
“Market sentiment is lukewarm amidst lingering geopolitical risk and as market participants head into U.S. CPI data,” said Kyle Rodda, senior financial market analyst at Capital.com.
“The lack of substantial news or progress in talks, with Iran doubling down on its commitment to govern the Strait of Hormuz, is keeping the risk for oil prices skewed to the upside,” he added.
Why it matters for Sri Lanka
Wednesday’s US consumer price index reading will not capture the most recent rise in energy costs but could shape expectations for the Federal Reserve’s meeting next month, with money markets pricing an even chance of a rate hike.
Higher crude prices feed directly into Sri Lanka’s import bill and fuel pricing formula, while sustained Gulf disruption has already been blamed for weaker tourist arrivals through Middle Eastern transit hubs.
Source: Oil, gold prices rise as geopolitical tensions mount before CPI — Daily Mirror/Reuters, August 12.