The United States has stopped the escalation of violence in Gaza, and gold and crude oil are extremely sensitive

On Monday (October 16), Asian trading hours saw stock markets slide, crude oil prices held above $90 a barrel, and the safe-haven dollar strengthened as fears of escalating violence in Gaza intensified and the prospect of the conflict spreading from Israel and Hamas to the wider region.

Japan's Nikkei Stock Average fell 2%, Hong Kong's Hang Seng index fell 0.43% and mainland blue-chip stocks fell 0.69%. Australia's S & P/ASX 200 index fell 0.35% and New Zealand's benchmark index fell about 1%.

The Israeli shekel fell to its lowest level in more than eight years after Prime Minister Benjamin Netanyahu vowed to "destroy Hamas" in retaliation for the atrocity on October 7, which killed 1,300 people and was the worst attack on civilians in Israeli history.

Blinken, the US secretary of state, is visiting the region seeking to prevent further escalation. Netanyahu agreed to lift a water blockade on parts of southern Gaza after talks with US President Joe Biden.

Brent crude futures hit a recent high of $91.20 on Monday and have since traded little changed, just below $91, surging 5.7 percent on Friday.

"Things are changing rapidly and it's too early to tell if Friday's hedge was baseless, but there is some positive news coming out," he said.PepperstoneChris Weston, director of research at the University of California, wrote in a report, citing the example of restoring water supplies.

"Risk and energy markets will be watching the headlines and actions of Iranian officials who say they have a responsibility to aid the Palestinians," Weston added.

The broader currency market reversed some of last weekend's moves, with the dollar index edging back to 106.51 from Friday's high of 106.79. The euro rose 0.14% to $1.05255 against the dollar, while the yen was essentially flat at 149.45 against the dollar.

Earlier in the day, the Israeli shekel fell to 3.9900 shekels per dollar for the first time since April 2015, although it has since rallied around 0.3% to 3.9650.

The yield on the benchmark 10-year Treasury note edged up to 4.6581 percent, more than 8 basis points on Friday as demand for the bond's safety fell.

Gold prices shrunk about $12, or 0.6 percent, to $1,919.29 an ounce after rising $63 on Friday.

"Ultimately, gold and oil prices are the most sensitive manifestations of conflict risk [in Gaza]," Kyle Rodda, senior financial marekt analyst at Capital.com, wrote in a note.

However, "identifying potential flashpoints and exits is extremely challenging," Rodda said.