By Wayne Cole
SYDNEY (Reuters) - Asian share markets looked to be heading into turbulence on Monday as a flare-up of tensions in the Middle East sent gold to its highest in almost seven years while oil flirted with four-month peaks.
The United States detected a heightened state of alert by Iran's missile forces, as President Donald Trump warned the U.S. would strike back, "perhaps in a disproportionate manner," if Iran attacked any American person or target.
Iraq's parliament on Sunday recommended all foreign troops be ordered out of the country after the U.S. killing of a top Iranian military commander and an Iraqi militia leader.
Oil prices added to their gains on fears any conflict in the region could disrupt global supplies.
Brent crude futures rose $1.05 to $69.65 a barrel, while U.S. crude climbed 94 cents to $63.99.
"The risk of further escalation has clearly gone up - given the direct attack on Iran, Iran's threat of retaliation and Trump's desire to look tough - posing the threat of higher oil prices," said Shane Oliver, chief economist at AMP Capital.
"Historically though oil prices need to double to pose a severe threat to global growth and we are long way from that."
MSCI's broadest index of Asia-Pacific shares outside Japan was off 0.16% though most major indices were yet to open. Futures
E-Mini futures for the S&P 500
Sovereign bonds benefited from the safety bid with yields on 10-year Treasuries
In currency markets, the Japanese yen remained the favoured safe harbour courtesy of Japan's massive holdings of foreign assets. Investors assume Japanese funds would repatriate their money during a true global crisis, pushing the yen higher.
Early Monday, the dollar had edged down to a three-month trough of 107.81 yen
The dollar was steadier against the other majors, with the euro being little changed at $1.1166
(Editing by Sam Holmes)
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Updated Date: Jan 06, 2020 06:06:07 IST