Asian stock markets were broadly higher on Tuesday after reports that the recent tensions in the Middle East were tapering off and the threat of Iranian retaliation against the United States had abated.
Gold prices hit their highest peaks in nearly seven years on Monday as traders flocked to the safe-haven asset on concerns about a potential war between the U.S. and Iran. But futures for the precious metal were down 0.13 percent as of 3:11 p.m. HK/SIN following the announcement that Iran wasn’t likely to strike back. Gold futures were trading at $1,567.20 per ounce after gold prices hit a high of $1,582.59 per ounce on Monday.
Oil prices, bolstered earlier in the week by concerns that tensions could disrupt supply out of the Middle East, were lower on Tuesday after the tensions seemed to decline and concerns of disruption diminished. U.S. WTI futures were down 0.84 percent in the late afternoon in Asia, to trade at $62.74 per barrel. Brent crude futures were down 0.91 percent to $68.28 per barrel.
Asian stock indexes took advantage of the cautiously positive geopolitical tone by heading broadly higher. Japan’s Nikkei 225 enjoyed the steepest gains, trading up 1.60 percent, while Australia’s ASX 200 gained 1.35 percent despite the wildfires that are ravaging the countryside and wreaking havoc on the countryside. It remains too early to tell how much economic damage will result from the continuing fires.
South Korea’s Kospi gained 0.95 percent and Hong Kong’s Hang Seng Index was up 0.51 percent. Both of China’s benchmark indexes were also higher on Tuesday afternoon. The gains in Asia followed a positive day on Wall Street which defied CNBC’s expectations for continued losses and saw all three benchmark indexes closing higher.
Chinese Negotiations Remain Vague
Though optimism remains high that the trade deal between the U.S. and China will be actualized, many details have still not been confirmed, troubling analysts and injecting skepticism into the markets. China, for example, has committed to increasing U.S. agricultural exports, including farm goods, but it hasn’t specified exactly how much it will increase its purchases. Chinese officials have been similarly vague about their “substantial” purchases of U.S. energy and manufacturing products.
Despite these open issues, the trade deal is largely expected to be signed in Washington next week, and traders will be watching carefully to see the exact terms of the deal and if they will be properly implemented.