NEW YORK (CNN/Money) - Stocks rallied in Europe and Asia Monday and gold and oil prices slumped as investors around the world bet that it was now more likely that war with Iraq will be delayed.

The reaction in financial markets came after millions of people around the world took part in anti-war protests over the weekend, sparking European leaders to hold an emergency summit in Brussels Monday to try to come to a unified front on the question of a possible war.

In other markets, the dollar rose versus the euro Monday, but lost some ground versus the yen. The U.S. currency has weakened for most of 2003, along with U.S. stocks, on fears about President Bush's strategy for a quick attack on Iraq. Some U.S. allies, notably France and Germany, have been urging a go-slow approach.

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On Friday, chief U.N. weapons inspector Hans Blix told the U.N. Security Council that his team had not found any weapons of mass destruction, but that they have not ruled out the possibility that Iraq could possess weapons. The speech got mixed marks and seemed to give the Security Council new reasons to disagree about the best course of action regarding Iraq.

NATO finally managed to agree Sunday on defensive planning for Turkey, a NATO member that borders Iraq, should a war start, after previous opposition to such a move from Germany, France and Belgium.

In the United States, National Security Advisor Condaleeza Rice said Sunday that talk of allowing Iraq more time to comply with weapons inspections simply eased the pressure on Baghdad. But she also said that "we are in a period now, a diplomatic window in which we should be discussing how the (U.N.) Security Council can best carry out its obligations."

Stocks promptly jumped in Asia Monday, with South Korea and Taiwan's markets posting gains of 4.5 percent each. Financial, electronic and tech issues led the rally. Tokyo's main Nikkei index posted a more modest gain of nearly 1 percent.

In Europe, markets closed higher. Insurance and technology stocks were among the leading sectors, sending the main market gauges up about 2 percent in London and Paris, and 1 percent in Frankfurt.

Meanwhile, oil prices sank in London after rising to two-year highs last week on fears that war would further disrupt supplies. Brent crude for April delivery lost 58 cents to $31.92 a barrel on London's International Petroleum Exchange.

Gold also tumbled on the belief that a war may be delayed, with investors pulling money out of what is often viewed as a safe haven in times of turmoil. Gold closed in London at $346.60, down $3.80, the lowest level in seven weeks and well below the 6-1/2-year-high of $388.50 hit early this month.

In foreign currency trading, the dollar gained versus the euro but drifted lower against the yen, with some international investors choosing to put funds back into the U.S. currency. The euro bought 1.073 U.S. dollars, down from 1.077 U.S. dollars late Sunday. The dollar fetched ¥120.18, down from ¥120.44 late Sunday.