Oil, gold prices surge amid US-Iran tension

KARACHI: Oil prices surged, gold hit a more than six-year high and most equities tumbled on Monday after the US killed last week a top Iranian general, which triggered fears of a major conflict in the Middle East.

The stock markets in Pakistan, Asian and Gulf countries tumbled.

Donald Trump warned of a "major retaliation" against Tehran after it threatened revenge for the killing of commander Qasem Soleimani, which shocked world markets and sparked a sell-off in stocks and a spike in crude.

Iran announced a further rollback of its commitments to its nuclear accord, while Iraq's parliament demandedthe departure of American troops from the country as fallout from the attack spread.

The crisis has jolted investors, who had been in an upbeat mood as China and the US prepare to sign their mini trade deal next week, while data indicate a slight improvement in the global economy.

Both main crude contracts were up more than two per cent in early Asian trade, with Brent above $70 for the first time since September when attacks on two Saudi Arabian facilities briefly halved output by the world's top producer.

White facing criticism for the action and calls to dial down the tension, the US president was in combative mood, saying the White House had dozens of sites lined up for strikes in case of retaliation by Iran — adding that he did not need Congressional approval, even for a "disproportionate" hit.

"Geopolitical tensions look like remaining elevated in coming days, so lending support to oil prices and keeping risk asset markets on the defensive," said Ray Attrill at National Australia Bank.

Safe-haven assets popular in times of turmoil were also on the rise, with gold at highs not seen since mid-2013, while the Japanese yen was at a three-month high against the dollar.