The implicit likelihood of an RBA rate cut next month also rose from around 40 percent shortly before Christmas to 65 percent, according to Australian interbank futures.
The benchmark S&P 500 index opened with modest gains in early trading Wednesday.
On MCX, February gold futures surged 1.5 per cent or almost Rs 615 on Wednesday to a record high of Rs 41,278 per 10 gram before receding a little bit, according to a Mint report.
The rise in gold prices is seen as a safe haven investment in the wake of geo-political tension in the Middle East.
However, the dollar raised 107.78 yen in early Asian trade against 108.42 yen in NY yesterday. We continue to maintain our positive bias on gold, targeting the level ₹42,700 followed by ₹44,300 and maintain support at ₹38,600.
"We've moved on from how Iran will respond to now anticipating the U.S. 52-pronged response as the USA military forces in the region are in a heightened state of alert while likely preparing for war", said Stephen Innes, strategist at AxiTrader. The attack comes after Iran's commander General Qasem Suleimani died on January 3 in a USA drone strike, which is seen as a retaliation by Iran.
The rally had continued into the start of 2020 as the US-Iran conflict heightened.
The apparent retaliation for last week's U.S. drone strike against a senior Iranian commander amplifies concern about a spiraling tit-for-tat conflict between the United States and Iran.
Another analyst warned that there could still be repercussions that could affect oil supply, air travel and even the US-China trade deal. The channel is the only way to move oil from the Persian Gulf to the world's oceans.
Risk aversion spiked as the attack threw financial markets into disarray, whipsawing Asian shares.
Brent LCOc1 futures fell $2.49 to $65.78 a barrel and U.S. WTI crude CLc1 declined $2.89 to $59.81 a barrel.
Futures for Brent crude, a global oil benchmark, were also up 1% at around $69 a barrel. The optimism about the prospects for demand for easing trade tensions between the United States and China has also contributed to the increase.