Commodity wrap: gold back above $5,000/oz, oil reverses losses

Gold prices reclaimed the $5,000 per ounce mark on Monday as the dollar slipped against a basket of major currencies. 

Silver prices also surged more than 6% to trade around $82 per ounce.

The white metal is gaining interest from reflation trades, driven by political developments in Japan and continuous US monetary easing expectations.

Oil prices reversed early losses on Monday and rose nearly 1% amid ongoing progress in talks between the US and Iran over the latter’s nuclear ambitions. 

Most base metals rose on Monday due to a weaker dollar, which lifted demand among overseas buyers. 

“Trading behaviour suggests a preference for selective, low‑commitment positioning, as the absence of a clear macro catalyst continues to keep participation muted,” Neil Welsh, head of metals market at Britannia Global Markets, said in an emailed commentary. 

Base metals opened the week on uneven ground, exhibiting consolidation rather than establishing new direction. 

At the time of writing, the three-month copper contract was at $13,155 per ton, up 0.8%, while the aluminium contract was at $3,126 per ton, up 0.5% from the previous close. 

Gold rebounds above $5,000

Buoyed by a softer dollar, gold prices increased on Monday as investors awaited a week filled with US economic data, which could provide further insight into the US Federal Reserve’s monetary policy.

“Gold is trading just below the $5,000 mark, with underlying strength still pointing to potential upside,” FXStreet said in a report. 

The People’s Bank of China continues to provide ongoing support for the market, maintaining its gold buying streak for a 15th straight month as of January. 

This sustained commitment to diversifying its reserves was demonstrated by the central bank’s addition of 0.04 million troy ounces to its holdings.

The dollar is currently facing downward pressure, fueled by increasing concerns regarding the independence of the Federal Reserve. 

This suggestion of political interference casts doubt on the Fed’s autonomy, contributing further to the dollar’s depreciation.

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. 

Currently, market expectations already factor in a minimum of two 25-basis-point interest rate cuts during 2026.

Gold prices on COMEX last traded at $5,080.65 per ounce, up 2.0%, while silver was 7% higher at $82.343 an ounce. 

Oil reverses early losses

The prospect of a new round of constructive nuclear negotiations between the US and Iran put renewed downward pressure on oil prices during early Asian trading on Monday. 

“Clearly, there’s still plenty of uncertainty over how things will evolve,” Warren Patterson, head of commodities strategy at ING Group, said in a note. 

This suggests the market will likely continue to price in a risk premium.

Despite reportedly constructive indirect talks, the US escalated pressure on Iran on Friday by imposing new sanctions on Iranian oil exports. 

Concurrently, US President Donald Trump signed an executive order that would permit tariffs on goods from countries trading with Iran, though he did not immediately implement these tariffs.

Oil prices shrugged off the losses from earlier in the day and were 1% higher at the time of writing.

The price of West Texas Intermediate crude was at $64.16 per barrel, up 1%, while Brent was also 1% higher at $68.74 a barrel. 

“Speculators remain nervous about being short in the oil market, given the ongoing uncertainty,” Patterson said. 

Uncertainty around oil has also led option market participants to become increasingly positioned for a potential move higher in prices, with a bullish volatility skew in Brent.

This week, a series of important economic data releases from the world’s major oil-consuming nations will be the central focus.

These figures will be closely monitored for indications regarding future interest rate decisions.

Markets are also continuing to assess the future direction of monetary policy under the newly nominated Fed chief, Kevin Warsh.

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