Last year ended on optimism over a global economic recovery but shaken investors have now tossed those feelings aside in the wake of heightened risks of conflict in the Middle East.
CMC Markets market analyst Margaret Yang said: "As a result of the sudden surge in geopolitical tensions, safe havens and crude oil regained traders' favour in a risk-averse environment."
Gold is at a six-year high, the Japanese yen hit a three-month high and Brent crude was more than US$70 a barrel.
Singapore-listed CNMC Goldmine added 3.6 per cent to 28.5 cents with 6.6 million shares traded, eight times its December daily average.
Investors also turned to Singapore-listed SPDR Gold shares ETF, an exchange-traded fund backed by the yellow metal. Its units added 2 per cent to US$148.48.
Interest in oil and gas plays also picked up. AusGroup surged 14.6 per cent to 4.7 cents and GSS Energy edged up 0.9 per cent to 11.5 cents. But Rex International was flat at 20.5 cents.
With investors turning risk-averse, the Straits Times Index (STI) closed at 3,218.86, down 19.96 points or 0.6 per cent.
Elsewhere, China, Hong Kong, Malaysia, South Korea and Taiwan fell with Japan's Nikkei 225 shedding 1.9 per cent in its first session of this year. Australia closed flat.
Oanda Asia-Pacific senior market analyst Jeffrey Halley told clients: "Expect cash to remain king for now, with downward pressure on developed-market sovereign yields to continue."
With fixed-income yields compressed, some turned to real estate investment trusts (Reits), with the iEdge S-Reit 20 Index adding 0.1 per cent.
Among second liners, Creative Technology gained 1.2 per cent to $3.43 ahead of the launch of an improved version of the Super X-Fi.
Trading volumes here clocked in at 1.32 billion securities worth $1.02 billion with losers besting gainers 277 to 154.
While United States-Iran tensions are high following last Friday's missile strike, Phillip Futures investment analyst Samuel Siew believes that this will probably be a temporary blip on sentiment and unlikely to be a thorn in the side for global economic recovery.
"Although global indices could be weighed down in the short term, the economic improvement and the brightened macros are expected to eventually lend support to market confidence," he said.
