Oil and Gold Slide Together, While Asia-Pacific Stocks Shine — Capital Rushes into Asian AI Plays

Recent markets have shown a striking two-speed dynamic. While commodity prices are weakening, Asia-Pacific equity markets are off to a powerful start, creating a sharp contrast. Starting with commodities: after the Trump administration signaled that imports of Venezuelan oil could be allowed, markets quickly reassessed global supply conditions. Expectations of increased oil supply triggered a sell-off, with international oil prices falling for a second consecutive day. Gold also came under pressure. After rising on safe-haven demand, gold prices retreated as traders took profits, giving the precious metals sector a temporary pause. Turning to Asia-Pacific equities, the picture could not be more different. The region has kicked off the year with strong momentum, with the MSCI Asia-Pacific Index recording one of its best starts in decades — an impressively strong opening. What’s driving this surge? The answer is capital rotation. Funds that were previously concentrated in higher-valued U.S. markets are now shifting toward Asian opportunities, particularly stocks linked to artificial intelligence (AI). Markets in South Korea, Japan, and Singapore have all recently hit new record highs, reflecting investors’ growing appetite for Asia’s AI-driven growth story.