Oil and Gold Climb as Geopolitical Risks and US Inflation Data Loom

Oil and gold prices advanced on Wednesday, while Asian shares edged higher, as investors weighed escalating geopolitical tensions against the release of key US inflation data later in the session.

US crude rose 0.89% to $83.94 a barrel, and Brent climbed 0.78% to $89.60. Spot gold gained 0.46% to $4,387.03 an ounce. The moves follow a sharp jump of about 5% on Monday, with both benchmarks settling at their highest levels since July 31 on Tuesday.

Geopolitical flashpoints remain in focus. Yemen's transport ministry reported that four crew members of an Egyptian-owned ship were killed in a Houthi attack on Tuesday, marking the first fatalities from such a strike since the conflict began on February 28. Separately, the US military said it struck a container ship attempting to sail toward an Iranian port.

In Asia, North Korea launched a ballistic missile off the peninsula's east coast, days ahead of joint military exercises between Seoul and Washington. Taiwan also condemned planned naval drills between China and an Indonesian warship off its east coast.

Market attention now turns to the US consumer price index (CPI) report, which could shape expectations for the Federal Reserve's next meeting. Economists polled expect consumer prices to edge up 0.1% in July after a 0.4% decline in June, with annual inflation slowing to 3.4% from 3.5%.

"Everyone's got their eyes on the CPI report," said Skye Masters, head of markets research at National Australia Bank. "If you do see the print coming in at zero, I think you'll obviously see a reasonable rally in Treasuries as the market unwinds expectations for the Fed tightening."

Markets are also pricing in an early rate hike in Japan, pushing the 5-year government bond yield to a record high of 2.1% and the 2-year yield to a 31-year peak of 1.63%. The yen was mostly flat at 159.31 per dollar, remaining off last week's high of 155.20 after suspected intervention by Japanese and US authorities.

The dollar index was little changed at 99.85, while the euro slipped 0.02% to $1.1538. European futures pointed to a slightly softer open, with Euro Stoxx 50 futures down 0.15%, while US S&P 500 e-minis were up 0.03%.