Gold and crude oil prices fell from their recent highs as US markets shrugged off geopolitical risks after a two-day selloff.

Three major US indices climbed higher overnight, led by communications (+1.22%), energy (+0.78%) and the health care (+0.59%) sector. Alphabet surged over 2.4% to hit a record high of US$ 1,397.8.

Again, impact of geopoliticaltensions on markets proved to be short-lived. But we can’t let complacency overtake cautiousness as the risk is far from depleting. Although a full brown war in the Middle East is highly unlikely, Iran may still carry out small-scale retaliations against the US for killing its top military commander last week. Tensions surrounding the Strait of Hormuz remains elevated in the near term. This puts crude oil price in a good position to spike up higher when tension re-escalates.

Technically, Brent oil price has pulled back to US$ 69.65 after hitting US$ 72.0 yesterday. Immediate support can be found at US$ 68.5 (76.4% Fibonacci Retracement), whereas resistance is likely to be US$ 72.2.

In the currency market, both US dollar index and Japanese yen fell sharply, unwinding their strength built in the previous two days. GBP and CAD were among the best performing G10 currencies this morning, whereas AUD and NZD were lagging.

Asian markets embraced a relief rebound this morning. Despite recent geopolitical turmoil, taking it as an opportunity to buy on dips as the Middle East crisis has little to do with fundamentals in the Asia region. In Singapore, Straits Times Index opened 0.7% higher, led by real estates, technology, consumer and financial sectors.

All three key readings for December Global PMIs swung back to above 50.0 threshold, suggesting an improving trend in fundamentals. This came in line with a string of Markit manufacturing PMIs for ASEAN economies earlier this month, which suggest pick up in output and new orders.

Gold - Cash

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