On Monday, gold prices rose above $5,000 an ounce as the dollar fell against a basket major currencies.
The silver price also jumped more than 6%, trading at around $82 an ounce.
White metal trades are gaining in popularity, mainly due to the political situation in Japan as well as expectations of continued US monetary ease.
The oil prices recovered from their early declines on Monday, and even rose by nearly 1% as progress was made in the ongoing talks between Iran and the US over its nuclear ambitions.
The demand for base metals increased on Monday as a result of a lower dollar.
In an email, Neil Welsh, Britannia Global Markets’ head of the metals markets, stated that “Trading behavior suggests a preferential preference for low-commitment, selective positioning” in light of the lack of macro catalysts.
The week began with a mixed bag for base metals, as they consolidated rather than set out a new course.
The three-month contract for copper was trading at $13,155 a ton at the time this article was written, an increase of 0.8%. Meanwhile, the contract for aluminium was $3,126 a ton at the same time, representing a 0.5% rise from its previous closing.
Gold prices rise above $5,000
Gold prices rose on Monday, boosted by the weaker dollar. Investors were awaiting a week of US economic data that could give them more insight into US Federal Reserve policy.
FXStreet reported that gold is currently trading below $5,000, but the underlying strength continues to point towards potential gains.
As of January, the People’s Bank of China has continued to support the gold market for 15 consecutive months.
The central bank has added 0.04 million troy-ounces of gold to its reserve holdings as a sign that it is committed to diversification.
Dollar is under pressure due to growing concerns about the Federal Reserve’s independence.
The Fed is under no illusion that it has autonomy. This undermines the value of the dollar.
Market participants are keenly focused on this week’s key US economic data releases–specifically nonfarm payrolls, consumer prices, and initial jobless claims–to gain further insight into the future direction of monetary policy.
Market expectations currently factor in at least two interest rate reductions of 25 basis points during 2026.
Silver was up 7% at $82.343 per ounce. Gold traded last at $5,080.65 an ounce on COMEX, an increase of 2.0%.
Early losses in oil reversed
Oil prices fell again during the early Asian trade on Monday due to the prospect of new constructive nuclear talks between Iran and US.
In a recent note, Warren Patterson, ING Group’s head of commodities, stated that there is still a lot of uncertainty about how the market will develop.
The market is likely to continue pricing in risk premiums.
The US increased pressure on Iran by imposition of new sanctions against Iranian oil exports on Friday, despite reportedly positive indirect discussions.
In parallel, US President Donald Trump issued an executive order which would allow tariffs to be imposed on products from nations that trade with Iran. However, he didn’t immediately implement the tariffs.
The oil prices recovered from the earlier losses and are 1% higher as of the writing.
Brent crude oil was also up by 1% at $68.74 per barrel.
Patterson stated that “speculators are still nervous about shorting the oil markets, due to the uncertainty.”
Brent has a volatile volatility that is skewing bullish.
The focus of this week’s news will be a number of economic releases by the major oil-consuming countries around the globe.
The figures are closely watched for future rate decision indicators.
The markets are continuing to evaluate the direction that monetary policy will take under Kevin Warsh, the new Fed head.
The post Commodity Wrap: Gold back above $5,00/oz and oil reverses its losses can be updated as new developments unfold.
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