Oil prices steadied on Monday after jumping more than 2% in the previous session, as disruptions to US crude output and rising tensions between the United States and Iran were offset by easing European supply concerns.

Brent crude futures slipped 7 cents, or 0.1%, to $65.81 a barrel by 12:51 GMT. US West Texas Intermediate crude fell 13 cents, or 0.2%, to $60.94 a barrel.

Both benchmarks posted weekly gains of about 2.7% at Friday’s close, reaching their highest levels since January 14.

Kazakhstan’s energy ministry said on Monday that the country was preparing to resume output at its largest oil fields, although industry sources said production levels remained low and that force majeure on exports of CPC Blend crude was still in place.

The Caspian Pipeline Consortium (CPC), which operates Kazakhstan’s main export route, said on Sunday that its Black Sea export terminal had returned to full loading capacity after maintenance work was completed on one of its three mooring points.

Priyanka Sachdeva, senior market analyst at Phillip Nova, said a winter storm had hit the US Gulf Coast, forcing shutdowns at wells in key oil and natural gas producing regions and putting additional strain on the power grid. She added that oil markets were seeing modest support as the outages tightened physical supply flows.

Analysts at JPMorgan said on Monday that around 250,000 barrels per day of US crude production had been lost due to severe weather, including disruptions in the Bakken field in Oklahoma and parts of Texas.

Traders also remained cautious about geopolitical risks, with tensions between the United States and Iran keeping investors on edge.

US President Donald Trump said last week that the United States had a “naval fleet” heading toward Iran, although he said he hoped it would not need to be used, while reiterating warnings to Tehran over killing protesters or restarting its nuclear programme.

A research note from SEB on Monday said that extremely cold US winter weather, higher heating fuel demand and the risk of US supply disruptions had contributed to the upside seen late last week, but added that US threats toward Iran — alongside the deployment of the USS Abraham Lincoln aircraft carrier to the Middle East — were likely the more important driver.

A senior Iranian official said on Friday that Iran would treat any attack as “a full-scale war against us”.

Meanwhile, three delegates from OPEC+ told Reuters that the group is expected to keep its oil output increases on hold for March at a meeting scheduled for Sunday.

The British pound climbed to a four-month high against a weakening US dollar on Monday, extending gains from last week after strong domestic data lifted the UK currency.

Data released on Friday showed that British companies recorded the fastest improvement in business activity since April 2024 in January, while retail sales rose unexpectedly last month, strengthening signs of an improving economic backdrop.

This helped push sterling up by 2% last week, marking its biggest weekly gain since March last year, even as the dollar broadly fell by a similar magnitude.

Sterling was last up 0.2% against the dollar at $1.3675, its highest level since September 17.

Dominic Bunning, head of G10 FX strategy at Nomura, said: “Cable will be driven much more by US developments than by what happens in the UK.”

The dollar index, which measures the US currency against six peers including sterling, fell 1.9% last week, its largest weekly decline since April, as investors returned to a “sell America” trade following US President Donald Trump’s threats to impose tariffs on European allies over the Greenland issue.

Against the euro, sterling slipped about 0.1% to 86.79 pence.

The pound also fell 1% to 210.17 Japanese yen, amid broad strength in the Japanese currency as speculation grew over coordinated intervention in currency markets by Japanese and US authorities to support the yen.

Nomura’s Bunning sees sterling potentially continuing to weaken against the euro, given the challenges facing the UK economy.

“We think base effects will drive inflation below target by the April reading,” he said.

“We expect the pace of disinflation to show through in headline rates over the coming months, which could create a risk that the Bank of England cuts rates more than markets currently price.”

The Bank of England is due to meet next week, though it is widely expected to keep interest rates unchanged.

Money markets are currently pricing in around 36 basis points of easing by year-end, implying one quarter-point rate cut and about a 45% chance of a second.

Sterling also remains sensitive to large swings in government bond yields, which edged lower on Monday after the Labour Party blocked Manchester Mayor Andy Burnham from returning to parliament, where he is seen as a potential rival to Prime Minister Keir Starmer.

The yield on the benchmark 10-year UK government bond fell by around 3 basis points to 4.49%.

Silver prices rose in the European market on Monday, extending gains for a third consecutive session and continuing to smash record highs, especially after breaching the psychological $100-per-ounce level and reaching $110 for the first time ever. The rally has been driven by strong buying from retail investors, alongside broad weakness in the US dollar against a basket of currencies.

Recent decisions by US President Donald Trump have deepened the loss of confidence in the US administration and in dollar-denominated assets, after adding to political confusion and economic uncertainty.

Price overview

• Silver prices today: Silver surged 6.6% to $110.13 per ounce, the highest level on record, from an opening level of $103.29, which also marked the session low.

• At Friday’s settlement, silver prices jumped 7.4%, recording a second consecutive daily gain after breaking above the $100-per-ounce level for the first time in history.

• Silver prices climbed 14.5% last week, marking a third straight weekly gain, driven by strong demand for the white metal.

US dollar

The US dollar index fell by more than 0.5% on Monday, extending losses for a third consecutive session and hitting a four-month low at 96.95 points, reflecting continued weakness in the US currency against a basket of major and secondary currencies.

As widely known, a weaker US dollar makes dollar-priced bullion more attractive to buyers holding other currencies.

The decline comes amid accelerating dollar selling, fueled by growing concerns over potential intervention by monetary authorities in both the United States and Japan to curb volatility and stabilize exchange rates.

This is compounded by rising political and economic risks in the United States, alongside waning confidence in dollar-denominated assets and expanding global uncertainty.

Trump threats

Over the weekend, US President Donald Trump sharply escalated his trade threats, announcing plans to impose 100% tariffs on Canada if it proceeds with a trade agreement with China.

He also threatened to levy 200% tariffs on French wine and champagne. This move was not merely economic in nature, but a clear attempt to pressure French President Emmanuel Macron to join Trump’s new initiative known as the “Peace Council” for Gaza.

US interest rates

• The Federal Reserve’s first monetary policy meeting of the year begins tomorrow, Tuesday, with decisions due on Wednesday. Expectations remain firmly anchored around keeping interest rates unchanged.

• According to the CME FedWatch tool, the probability of leaving US interest rates unchanged at the January 2026 meeting stands at 97%, while the probability of a 25-basis-point rate cut is priced at 3%.

• Investors are currently pricing in two US rate cuts over the coming year, while Federal Reserve projections point to a single 25-basis-point cut.

• To reassess these expectations, investors are closely monitoring upcoming US economic data.

Silver outlook

HSBC noted in a report last week that the recent surge in gold and silver prices has been driven by geopolitical tensions related to Greenland.

Gold prices rose on Monday at the start of the week, extending gains for a sixth consecutive session and continuing to shatter record highs after breaching the historic psychological $5,000-per-ounce level for the first time ever.

Prices are now moving sharply closer to $5,100 per ounce, supported by strong demand for the metal as a safe haven amid rising global geopolitical risks, alongside a broad and sustained decline in the US dollar.

Recent decisions by US President Donald Trump have deepened the loss of confidence in the US administration and in dollar-denominated assets, after increasing political confusion and economic uncertainty.

Price overview

• Gold prices today: Gold rose 2.15% to $5,093.13 per ounce, marking a new all-time high, from an opening level of $4,986.45, which also represented the session low.

• At Friday’s settlement, the precious metal gained about 1.0%, recording a fifth consecutive daily advance, supported by weaker US dollar levels.

• Gold prices climbed 8.5% last week, posting a third straight weekly gain and the strongest weekly rise since March 2020, during the outbreak of the coronavirus pandemic.

US dollar

The US dollar index fell by more than 0.5% on Monday, extending losses for a third straight session and hitting a four-month low at 96.95 points, reflecting continued weakness in the US currency against a basket of major and secondary currencies.

As widely known, a weaker US dollar makes dollar-priced gold bullion more attractive to buyers holding other currencies.

The decline comes amid an acceleration in dollar selling, driven by growing concerns over potential intervention by monetary authorities in both the United States and Japan to curb volatility and stabilize exchange rates.

This is compounded by rising political and economic risks in the United States, alongside waning confidence in dollar-denominated assets and expanding global uncertainty.

Trump threats

Over the weekend, US President Donald Trump sharply escalated his trade threats, announcing plans to impose 100% tariffs on Canada if it proceeds with a trade agreement with China.

He also threatened to levy 200% tariffs on French wine and champagne. This move was not merely economic in nature, but a clear attempt to pressure French President Emmanuel Macron to join Trump’s new initiative known as the “Peace Council” for Gaza.

US interest rates

• The Federal Reserve’s first monetary policy meeting of the year begins tomorrow, Tuesday, with decisions due on Wednesday. Expectations remain firmly anchored around keeping interest rates unchanged.

• According to the CME FedWatch tool, the probability of leaving US interest rates unchanged at the January 2026 meeting stands at 97%, while the probability of a 25-basis-point rate cut is priced at 3%.

• Investors are currently pricing in two US rate cuts over the coming year, while Federal Reserve projections point to a single 25-basis-point cut.

• To reassess these expectations, investors are closely monitoring upcoming US economic data.

Gold outlook

Kyle Rodda, analyst at Capital.com, said the latest catalyst is effectively a crisis of confidence in the US administration and US assets, exacerbated by a series of erratic decisions taken by the Trump administration last week.

Rodda added that the Trump administration has created a lasting fracture in how things operate, prompting investors to turn to gold as the only viable alternative.

HSBC noted in a report last week that the recent surge in gold and silver prices was driven by geopolitical tensions related to Greenland.

Analysts at UBP said gold prices have been supported by sustained demand from both institutional and retail investors. They added that they expect another strong year for gold, reflecting continued investment demand from central banks and individuals, with a year-end price target of $5,200 per ounce.

Goldman Sachs raised its December 2026 gold price forecast on Thursday to $5,400 per ounce from $4,900 previously.

SPDR

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by about 6.87 metric tons on Friday, marking a second consecutive daily increase and lifting total holdings to 1,086.53 metric tons, the highest level since May 3, 2022.