(Adds U.S. market open, byline, dateline; previous LONDON)
* Iran attacks Iraqi bases housing U.S. forces
* Wall Street rebounds, global index trades flattish
By Herbert Lash
NEW YORK, Jan 8 (Reuters) - Gold and oil prices retreated on
Wednesday after earlier surging, and shares on Wall Street
advanced, amid investor optimism that Iran's attack on U.S.
forces in Iraq was unlikely to escalate into a full-blown
conflict in the region.
Iran said it had fired missiles at U.S. targets in Iraq in
retaliation for last week's U.S. drone strike that killed
Iranian commander Qassem Soleimani and raised fears of a new war
in the Middle East. Gold surged past $1,600 for the first time in nearly seven
years in earlier trade, before paring gains as fears of a larger
conflict in the Middle East abated amid milder rhetoric between
Iran and the United States. The safe-haven yen fell from
three-month highs against the dollar and the Swiss franc,
another safe haven, also pared gains.
Brent oil futures fell off a four-month peak hit in frenzied
early trading after the Iranian rocket attack appeared to have
no impact on oil infrastructure or crude flows in Iraq.
MSCI's broad gauge of stocks across the globe
.MIWD00000PUS shed 0.04%, but stocks on Wall Street gained,
along with bourses in Paris, Frankfurt and Milan.
U.S. President Donald Trump said there were no American
casualties in the Iranian strikes and that Tehran appeared to be
standing down. Iran's long-term goal of a sphere of influence might be
jeopardized if it attacks too aggressively, said John Vail,
chief global strategist at Nikko Asset Management in Tokyo.
"The impact on global risk assets will probably moderate
from here as we are likely past the worst part of the crisis,"
Vail said in an e-mail. "Neither side wants a war."
Investors are betting on a de-escalation in Middle East
tensions and the United States and Iran to revert to a
tit-for-tat relationship, said Sebastien Galy, senior macro
strategist at Nordea Asset Management in Luxembourg.
"The Iranians failed to cause U.S. casualties," Galy said.
The pan-European STOXX 600 index .STOXX rose 0.07% and
emerging market stocks lost 0.41%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
80.27 points, or 0.28%, to 28,663.95. The S&P 500 .SPX gained
9.04 points, or 0.28%, to 3,246.22 and the Nasdaq Composite
.IXIC added 22.84 points, or 0.25%, to 9,091.42.
Spot gold XAU= was slightly subdued at $1,573.50 per
ounce, having soared to $1,610.90 earlier in the session, its
highest since March 2013
Brent crude prices fell on reports the Iranian rocket attack
appeared to have no impact on oil infrastructure or crude flows,
and on a report showing a surprise build in U.S. stockpiles.
The U.S. Energy Information Administration (EIA) said crude
inventories rose by 1.2 million barrels during the week ended
Jan. 3. EIA/S Analysts had expected a decline.
Brent LCOc1 futures fell $1.04 to $67.23 a barrel and U.S.
West Texas Intermediate (WTI) crude CLc1 declined $1.39 to
$61.31 a barrel. WTI futures earlier hit $65.65, the highest
since late April.
U.S. Treasury yields were little changed, retracing an
overnight drop as investor concerns eased about a U.S.-Iran
conflict.
Overnight, yields on the 10-year U.S. Treasury note
US10YT=RR dropped to 1.705%, its lowest in more than a month,
as worried investors bought U.S. government debt in a safe-haven
move after Iranian forces fired missiles at military bases
housing American troops in Iraq.
Benchmark 10-year notes US10YT=RR last rose 2/32 in price
to yield 1.8178%.
The dollar index .DXY , tracking the unit against six major
peers, rose 0.26%, with the euro EUR= down 0.36% to $1.1111.
The Japanese yen weakened 0.36% versus the greenback at
108.81 per dollar.
Tensions in the Middle East https://www.reuters.com/live-events/tensions-in-the-middle-east-id2917592
Iran missile strikes jolt gold https://tmsnrt.rs/2sNtCJB
Iran strikes sends FX markets into a spin https://tmsnrt.rs/35EEV4c
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