Oil prices moved within a narrow range on Monday as investors assessed the implications of upcoming US–Iran talks aimed at de-escalation, against expectations of increased supply from the OPEC+ alliance.

Brent crude futures rose 11 cents, or 0.2%, to $67.86 per barrel as of 13:17 GMT.

US West Texas Intermediate crude climbed to $62.99 per barrel, up 10 cents. The contract will not see a settlement on Monday due to the Presidents’ Day holiday in the United States.

Trading is also expected to remain subdued with markets closed in China, South Korea, and Taiwan for Lunar New Year holidays.

Previous Weekly Declines Driven by De-escalation Hopes

Benchmark contracts posted weekly losses last week, with Brent ending down about 0.5% and West Texas Intermediate losing 1%, after US President Donald Trump said Washington could reach an agreement with Tehran within the next month.

The two countries are scheduled to hold a second round of talks in Geneva on Tuesday regarding Iran’s nuclear program.

Ahead of those talks with Washington — mediated by Oman — Iran’s foreign minister met with the head of the UN’s International Atomic Energy Agency.

Tehran Seeks Economic–Nuclear Deal

Reports citing an Iranian diplomat said Tehran is seeking a nuclear agreement with the United States that delivers economic gains for both sides, with proposed investments in the energy and mining sectors and aircraft purchase deals included in discussions.

On the other side, the US is preparing for the possibility of a sustained military campaign if talks fail, according to US officials speaking to Reuters.

Iran’s Revolutionary Guard warned that if Iranian territory is struck, it could respond by targeting any US military base.

Price Scenarios Between $60 and $80

SEB analysts said in a note: “An escalation with Iran could push Brent to $80 per barrel, while easing tensions could bring it back to $60.”

While US–Iran tensions support prices, the Organization of the Petroleum Exporting Countries and its allies — known as OPEC+ — are capping the upward momentum, as the group is inclined to resume production increases from April at its March 1 meeting after a three-month pause, according to Reuters.

Shifts in Russian Oil Flows to Asia

Meanwhile, China’s imports of Russian oil are expected to rise for the third consecutive month to a new record in February, after India reduced its purchases under US pressure, according to traders and shipment-tracking data.

The Japanese yen declined on Monday, giving back part of the strong gains it recorded last week following weak growth data, while the US dollar held steady as recent inflation figures reinforced bets on Federal Reserve interest rate cuts later this year.

Liquidity is likely to remain thin in Monday’s trading, with markets closed in the United States, China, Taiwan, and South Korea due to holidays.

The yen fell by 0.5% to 153.43 against the dollar on Monday, after jumping about 3% last week — its biggest weekly gain in roughly 15 months — following a landslide election victory by Prime Minister Sanae Takaichi and her Liberal Democratic Party.

However, Monday’s data revealed some challenges facing Takaichi and her government, as the Japanese economy barely grew in the past quarter, posting an annualized expansion of just 0.2%.

Mohamed Al-Sarraf, assistant for FX and fixed income at Danske Bank, said: “After the election, the political dust may be settling somewhat — at least in the near term — and we are seeing the yen become more sensitive to data.”

Government–central bank coordination without direct requests

Bank of Japan Governor Kazuo Ueda and Prime Minister Takaichi held their first bilateral meeting since the election on Monday.

Ueda said the two sides conducted a “general exchange of views on economic and financial developments,” noting that the prime minister made no specific requests regarding monetary policy.

The Bank of Japan holds its next interest rate meeting in March, where traders assign a 20% probability to a rate hike. Economists polled by Reuters last month expected the central bank to wait until July before tightening policy again.

The Bank of Japan raised its key policy rate in December to its highest level in 30 years at 0.75%, but it remains well below most major economies, contributing to notable yen weakness and prompting direct currency interventions in past years.

US rate cut bets

Data released on Friday showed US consumer prices rose less than expected in January, giving the Federal Reserve additional room to ease monetary policy this year.

Kyle Rodda, senior financial analyst at Capital.com, said: “Markets have started to hint at pricing in a third rate cut.”

Futures indicate about 62 basis points of easing over the remainder of the year, equivalent to two quarter-point cuts, with roughly a 50% chance of a third. The next cut is most likely in June, with markets assigning an 80% probability to that move.

Currencies and bonds moves

The euro slipped by less than 0.1% to $1.1862, while the British pound edged down slightly to $1.3647.

The US dollar index — which measures the currency against six major peers — rose by less than 0.1% to 97, after falling 0.8% last week.

Most post-inflation data moves were concentrated in the bond market, where the US two-year Treasury yield — which reflects Fed policy expectations — closed at its lowest level since 2022 on Friday, while the 10-year yield fell by 4.8 basis points. US bond markets remain closed on Monday.

The Swiss franc, Australian, and New Zealand dollars

The Swiss franc edged lower to 0.7696 against the dollar after gaining more than 1% last week, as investors grew more cautious about possible Swiss National Bank intervention to curb the strength of the traditional safe-haven currency.

OCBC analysts said in a note: “Any further gains in the franc increase the risk of downside surprises relative to the Swiss National Bank’s inflation forecasts.”

They added that this “could challenge the bank’s recent tolerance for currency strength, even if the probability of a return to negative rates remains low.”

Meanwhile, the Australian dollar rose 0.2% to $0.7083, remaining below last week’s three-year high of $0.71465, while the New Zealand dollar held steady at $0.6041 ahead of the Reserve Bank of New Zealand policy meeting on Wednesday, where rates are widely expected to be kept unchanged.

Silver prices fell by 3.5% in the European market on Monday at the start of the week’s trading, approaching again a one-week low, amid thin trading due to the closure of major markets in the United States and China, and under negative pressure from a stronger US dollar.

Strong US labor market data reduced the likelihood that the Federal Reserve will cut US interest rates in March, as investors await more evidence on the policy path later this year.

Price overview

•Silver prices today: Silver fell by 3.5% to ($74.67), from the session opening level at ($77.40), and recorded a high at ($78.19).

•At Friday’s settlement, silver prices rose by 2.9%, after hitting a one-week low earlier in the session at $74 per ounce.

•The white metal silver lost 0.6% last week, marking its third consecutive weekly loss.

Global markets

US markets are closed today for Presidents’ Day, while markets in China and several other Asian countries are closed for the Lunar New Year holiday until February 23.

The US dollar

The dollar index rose on Monday by more than 0.1%, reflecting stronger US currency levels against a basket of major and minor currencies.

Strong US labor market data released last week reduced the probability of a Federal Reserve rate cut in March.

US interest rates

•Chicago Federal Reserve President Austan Goolsbee said on Friday that interest rates could decline, but noted that inflation in the services sector remains elevated.

•According to the CME FedWatch tool: pricing for keeping US interest rates unchanged at the March meeting stands at 90%, while pricing for a 25 basis point cut stands at 10%.

•To reprice those expectations, investors are closely watching further US economic data releases, in addition to comments from Federal Reserve officials.

Silver outlook

Zain Vawda, analyst at MarketPulse by OANDA, said: As a more cycle-sensitive metal, any sign of economic strength reduces silver’s appeal as a safe haven compared with gold, and strong jobs data points to less immediate need for safe-haven assets.

Gold prices fell by 1.5% in the European market on Monday at the start of the week’s trading, amid thin activity due to the closure of major markets in China and the United States, and under negative pressure from a stronger US dollar.

Strong US labor market data reduced the likelihood that the Federal Reserve will cut US interest rates in March, with investors waiting for further evidence on the policy path later this year.

Price overview

•Gold prices today: Gold fell by 1.5% to ($4,964.84), from the session opening level at ($5,042.22), and recorded a high at ($5,042.22).

•At Friday’s close, gold prices rose by 2.45% after US consumer price data came in below expectations.

•The precious metal gold recorded a 1.6% gain last week, marking its second consecutive weekly advance.

Global markets

US markets are closed today for Presidents’ Day, while markets in China and several other Asian countries are closed for the Lunar New Year holiday until February 23.

The US dollar

The dollar index rose on Monday by more than 0.1%, reflecting stronger US currency levels against a basket of major and minor currencies.

As is known, a stronger US dollar makes dollar-denominated gold bullion less attractive to buyers holding other currencies.

Strong US labor market data released last week reduced the probability of a Federal Reserve rate cut in March.

US interest rates

•Chicago Federal Reserve President Austan Goolsbee said on Friday that interest rates could decline, but noted that inflation in the services sector remains elevated.

•According to the CME FedWatch tool: pricing for keeping US interest rates unchanged at the March meeting stands at 90%, while pricing for a 25 basis point cut stands at 10%.

•To reprice those expectations, investors are closely watching upcoming US economic data, in addition to comments from Federal Reserve officials.

Gold outlook

UBS analyst Giovanni Staunovo said: Gold is trading in a soft range around $5,000 per ounce this week, with liquidity reduced due to holidays.

Zain Vawda, analyst at MarketPulse by OANDA, said: I suggest lowering my medium-term gold price target from $5,500 to a range between $5,100 and $5,200 for now, but conditions remain highly volatile.

Vawda added: As a more cycle-sensitive metal, any sign of economic strength reduces silver’s appeal as a safe haven relative to gold, and strong jobs data points to less immediate need for safe-haven assets.

SPDR fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, increased on Friday by about 0.86 metric tons, bringing the total to 1,077.04 metric tons, rebounding from 1,076.18 metric tons, which was the lowest level since January 15.