Gold at record; resource plays boost stocks

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Stocks stalled

The heightened sense of caution has stalled a rally in global stocks, which have traded in a broad range since mid-October.

After falling last week, MSCI's index of Asia-Pacific stocks outside of Japan rose 0.7%, taking its gains so far this year to almost two-thirds.

Australian shares rose 0.6%, with shares of Drillsearch Energy jumping more than 19% after the company reported a promising oil find.

Financial bookmakers expected major European indexes to open between 0.6 and 0.8% higher on the back of stronger commodity prices, snapping a four-session losing streak.

Crude oil futures rose 1% to USD 78.24 a barrel, supported by heightened tensions between Iran and Western nations which raised speculation of a potential supply risk.

Iran's armed forces launched large-scale air defence war games on Sunday to show off the country's deterrence capabilities in the face of pressure from the West over its nuclear programme, and a cleric in the Revolutionary Guards warned that the Islamic Republic would fire missiles at "the heart of Tel Aviv" if attacked.

"There's always a supply risk premium that can arise from these elevated tensions in the Middle East and that is a factor pushing up oil prices this morning," said Toby Hassall, a commodities analyst at the Commonwealth Bank of Australia.

Supply concerns have also supported copper , which rose to a 13-month high last week.

Workers at Chile's Spence copper mine voted early on Monday to end a 42-day strike, defusing fears of wider output disruptions after agreeing a wage deal with owner BHP Billiton, their union leader said.

Three-month copper on the London Metal Exchange rose USD 115 or 1.7% to USD 6,960 a tonne.