Gold surged more than 1% to above $3,380 per ounce on Monday, setting a new record high, buoyed by safe-haven demand amid rising global trade tensions, as well as a weaker U.S. dollar. Last week, President Donald Trump ordered an investigation into potential new tariffs on all U.S. critical mineral imports—a significant escalation in the trade dispute with global partners, particularly China. In addition, the U.S. dollar fell to a three-year low as investor confidence in the U.S. economy took another hit over Trump's plans to shake up the Federal Reserve. White House economic adviser Kevin Hassett said on Friday that the Trump administration was continuing to study whether they could fire Fed Chair Jerome Powell, a move that has great consequence for the central bank's independence and for global markets. Moreover, the European Central Bank's recent interest rate cut enhanced the precious metal's allure in a low-yield environment.
WTI crude oil futures dropped more than 1% to below $64 per barrel on Monday as progress in nuclear negotiations between the U.S. and Iran eased concerns over potential supply constraints. Iran’s foreign minister said that the two nations on Saturday agreed to start drawing up a framework for a possible nuclear deal. A U.S. official also described the talks as showing "very good progress." This came after the Trump administration last week imposed new sanctions targeting Chinese importers of Iranian oil. A third round of high-level talks is set to take place next Saturday in Oman. Prices also declined on concerns that the U.S.-led trade war could slow global economic growth and, in turn, dampen energy demand. Adding to the pressure, OPEC+ is still expected to raise output by 411,000 barrels per day in May, though some of that increase could be offset by cuts from countries that have been exceeding their quota.
