Oil, gold prices rise as geopolitical tensions mount before CPI

Oil and gold prices increased while regional shares cautiously rose on Wednesday, amid heightened geopolitical tensions ahead of crucial US inflation data. The Japanese yen remained relatively stable against the dollar after Japan and the US intervened in currency markets. Conflicting reports emerged, with the US accusing Iran-aligned Houthis of attacking ships, while North Korea launched a missile early Wednesday.

Markets now focus on the upcoming US consumer price index (CPI) data for clues about potential Federal Reserve rate hikes. Kyle Rodda noted that market sentiment remains cautious due to persistent geopolitical risks and until the CPI figures are released. US crude oil prices rose 0.89% to $83.94 a barrel, while Brent crude climbed to $89.60 per barrel, marking their highest closings since July.

Gold prices also climbed 0.46% to $4,387.03 an ounce. Tragic news from the Houthi attack resulted in the death of four crew members on an Egyptian vessel, marking the first such incident since the Iran conflict began in February. Despite ongoing hostilities, no resolution in sight, North Korea's missile launch came just before planned joint military drills between South Korea and the US.

Taiwan expressed concern over planned naval exercises between China and Indonesia. The upcoming CPI report will not reflect the recent surge in energy costs but could still influence expectations for the Fed's meeting. Consumer prices are projected to increase by 0.1% in July, with annual inflation expected to decelerate to 3.4%.

The Japanese yen weakened slightly against the dollar following suspected currency market interventions, while the euro decreased marginally.