Gold and silver prices remained in the red on Monday as a stronger dollar dampened demand for the precious metals.
Thin trading volumes in China and the US on account of public holidays also contributed to lower price levels on Monday.
Meanwhile, as the US and Iran prepare for another round of nuclear negotiations, oil prices continue to find strong support.
Trading in base metals was subdued, resulting in consolidation after the sharp price movements seen in January.
This quiet activity is attributed to thinner markets caused by the beginning of the Chinese New Year and a public holiday in the US.
Bullion falls
Gold initially edged up in the Asian Pacific session, briefly trading above $5,000 per ounce.
However, sellers quickly emerged, driving prices back down.
As the European mid-morning approached, the metal was tracking sideways, just managing to stay above the $5,000 mark.
Stock markets in the US and several Asian countries were closed due to public holidays—Presidents Day in the US and Lunar New Year across parts of Asia, including China.
The dollar strengthened, which made gold and silver (greenback-priced bullion) more costly for international buyers.
Recent US economic data presented a mixed outlook for Federal Reserve interest rate cuts.
Specifically, US consumer price increases were lower than anticipated in January, but job growth unexpectedly accelerated during the same period.
Adding to the dialogue, Federal Reserve Bank of Chicago President Austan Goolsbee indicated on Friday that while interest rates could decrease, elevated services inflation remains a key concern.
“At the very least, gold may have to consolidate further before higher prices are seen. And there’s always the possibility that the top is already in,” David Morrison, senior market analyst at Trade Nation, said.
Unlike gold, silver’s daily MACD has fallen back into negative territory below the ‘neutral’ line.
The sharp downside correction from late January’s extremely overbought levels may be deterring many traders from establishing new long positions, despite some possibly looking for a bounce and retest of recent highs.
“While precious metals remain supported by fundamentals, near-term price action suggests hesitation as investors await clearer signals from the Federal Reserve and upcoming macro data.”
Oil remains supported
Investors drove oil prices higher, balancing the market effects of impending US-Iran negotiations, intended to reduce tensions, against the anticipation of increased supply from OPEC+.
Oil trading is expected to be subdued as markets in China, South Korea, and Taiwan are closed for the Lunar New Year holidays.
Both Brent and WTI benchmarks ended last week lower, with Brent down about 0.5% and WTI losing 1%.
This followed comments from US President Donald Trump suggesting a potential deal with Tehran could be reached within the next month.
The prospect of a deal is tied to upcoming discussions: the two countries are scheduled to hold a second round of talks in Geneva on Tuesday regarding Tehran’s nuclear program.
Ahead of these Oman-mediated talks with Washington, Iran’s foreign minister met with the head of the UN nuclear watchdog.
Reportedly, an Iranian diplomat stated that Iran is seeking a nuclear agreement with the US that offers mutual economic benefits, with potential topics including energy and mining investments and aircraft purchases.
“However, there is still a large risk premium priced into the market given the uncertainty over how the situation between the US and Iran evolves,” Warren Patterson, head of commodities strategy at ING Group, said in a note.
Speculation is increasing regarding the decisions OPEC+ might make concerning production levels for April at their meeting on March 1.
The group had previously paused supply increases for the first quarter of this year, citing seasonal factors.
“However, with our balance sheet continuing to show a large surplus in the second quarter, there is no need for the group to bring additional supply onto the market from April,” Patterson added.
“In our balance sheet, we are not assuming further increases from the group, so clearly, if further supply is brought onto the market, it will only lead to our surplus expectations growing.”
At the time of writing, the price of West Texas Intermediate crude was at $63.29 per barrel, up 0.9%, while Brent was at $68.28 a barrel, up 0.8%.
Base metals fall
Base metals trading has been muted, with market activity thinned out by the Chinese New Year holiday and a public holiday in the US.
The complex is currently consolidating after a period of sharp moves in January, with copper holding just below the $13,000 level.
“With many Asian desks sidelined, liquidity will be patchy with most participants likely to be content to wait for clearer direction from US rates and a potential Chinese demand pulse in March’s post-holiday trade,” Neil Welsh, head of metals at Britannia Global Markets, said in an emailed commentary.
Meanwhile, aluminium’s focus is on Washington, where the administration is narrowing the tariff package, which had doubled levies on primary metal and extended them to derivative products like cans, cutlery, car parts, and appliances.
Initial headlines of relief for some downstream goods temporarily hurt sentiment, with aluminium briefly testing $3,000 on Friday before recovering.
Treasury officials have emphasised that the forthcoming adjustment to the tariffs will be focused and specific, rather than a sweeping repeal.
This limited scope mitigates any significant immediate drop in premiums.
Furthermore, it provides only minimal relief to consumers, who have borne the majority of the tariff expense since 2025.
“With liquidity constrained by holidays and a light macro calendar, prices may be range-bound for much of the week,” Welsh added.
The three-month copper contract on the London Metal Exchange was at $12,888 per ton, down 0.3%, while aluminium was at $3,070.50 per ton, down 0.8%.
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