Asia stocks extend losses as oil surge stokes inflation worries.
Asian stocks extended declines on Tuesday as escalating U.S.-Iran tensions pushed oil prices near one-month highs, reviving inflation concerns and clouding the outlook for global interest rates, while investors awaited key U.S. inflation data later in the day.
U.S. stock futures ticked lower in Asian trade after Wall Street closed sharply lower overnight.
Oil prices surge, reviving inflation concerns
Oil prices extended Monday’s 10% rally after U.S. President Donald Trump said Washington would reinstate a blockade on Iranian shipping and impose a 20% charge on cargo passing through the Strait of Hormuz, while renewed U.S. military strikes on Iran heightened fears of disruptions to global crude supplies.
Higher oil prices reignited worries that inflation could remain elevated, prompting traders to scale back expectations for monetary easing.
Gold rebounds from two-week low.
Gold prices recovered on Tuesday after briefly trading at their lowest levels in two weeks, with bargain hunting emerging after the previous session’s sharp selloff as investors awaited U.S. inflation data and Federal Reserve Chair Kevin Warsh’s congressional testimony.
Persistent tensions in the Middle East and expectations that the Federal Reserve could keep interest rates elevated also remained in focus after hawkish remarks from Fed Governor Christopher Waller.
At 05:58 ET (09:58 GMT), XAU/USD rose 0.54% to $4,022.87 an ounce, while Gold Futures gained 0.59% to $4,029.22. XAG/USD advanced 0.63% to $58.02 an ounce, while XPT/USD added 0.42% to $1,610.82.
Middle East tensions keep inflation concerns in focus
Gold recovered after tumbling nearly 3% on Monday, its steepest one-day decline in more than a month, with the metal briefly falling below the $4,000-an-ounce mark for the first time in three weeks.
Bitcoin flat at $62.7k.
Bitcoin moved little on Tuesday, remaining pinned near annual lows as heightened U.S.-Iran tensions and concerns over rising inflation and interest rates kept markets largely averse towards speculative plays like cryptocurrencies.
A sharp pick-up in capital outflows from spot Bitcoin exchange-traded funds also pressured the world’s largest crypto, with institutional selling in the sector showing few signs of slowing after two straight months of outflows.
Bitcoin was flat at $62,778.5 by 01:19 ET (05:19 GMT).
Iran tensions, rate hike jitters pressure crypto
Bitcoin moved little as risk appetite was quashed by continued military action between the U.S. and Iran, with the two countries also maintaining conflicting stances on the Strait of Hormuz.
U.S. President Donald Trump said the waterway remained open and that the U.S. would use military force to facilitate shipping in the region. But Trump said the U.S. would also charge a 20% fee on cargo being moved through Hormuz.
His comments came as the U.S. carried out a third consecutive day of attacks on Iran, with Tehran retaliating by attacking ships in Hormuz and launching strikes at U.S. military bases across the Middle East.
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