Oil prices surged by approximately 3% on Monday as stalled peace negotiations between the United States and Iran, combined with a dual blockade in the Strait of Hormuz, intensified global supply concerns.

Brent crude rose by $3.00, or 2.9%, to settle at 108.36 dollars per barrel—its highest level in three weeks. U.S. West Texas Intermediate (WTI) climbed $2.45, or 2.6%, to reach 96.85 dollars. These gains follow a historic week where Brent soared 17% and WTI 13%, marking the largest weekly increases since the conflict began.

Market optimism regarding a ceasefire faded over the weekend. While President Donald Trump signaled openness to a call for negotiations, he maintained that Iran would never be permitted to possess nuclear weapons. Meanwhile, Iranian Foreign Minister Abbas Araghchi conducted a high-stakes diplomatic tour through Oman and Pakistan before heading to Moscow. Despite these efforts, the two nations remain fundamentally at odds over the nuclear file and freedom of navigation through the Strait.

The dual blockade—Iran’s restriction of the Strait and the U.S. counter-blockade of Iranian ports—has paralyzed one of the world's most critical energy arteries. Analysts at PVM Oil Associates estimate that between 10 to 13 million barrels per day (bpd) are currently offline.

- Vessel Traffic: Data from Kpler indicates that shipping through the Strait remains at a virtual standstill; on Sunday, only a single oil products tanker was recorded entering the Gulf.

- Inventory Drawdown: Global oil inventories are depleting at a record pace due to the ongoing disruptions.

Reflecting the severity of the crisis, Goldman Sachs significantly raised its oil price projections for the fourth quarter:

- Brent: Raised to 90 dollars per barrel.

- WTI: Raised to 83 dollars per barrel.

The bank warned that the global market is shifting toward a massive deficit. Analysts noted that the unprecedented scale of this shock and exceptionally high refined product prices pose economic risks that extend far beyond the raw cost of crude.

Silver prices rose in the European market on Monday, continuing their recovery for the second consecutive day from nearly two-week lows. This move is driven by active buying at lower price levels and support from a softening U.S. dollar in the foreign exchange market.

The decline in the American currency comes amid renewed hopes for a peace agreement to end the Iranian conflict, particularly following reports that Iran has submitted a new peace proposal to the United States.

Price Overview

- Silver Prices Today: Silver prices rose by 1.1% to ($76.59), from an opening level of ($75.69), after recording a daily low of ($74.74).

- At the close of Friday's trading, silver achieved a 0.3% increase, recovering from a nearly two-week low of $73.96 per ounce reached earlier that session.

- Over the past week, silver prices lost 6.3%, marking their first weekly decline in five weeks due to the escalation of tensions between the U.S. and Iran.

The U.S. Dollar

The dollar index fell by 0.25% on Monday, continuing its slide for the second session and moving away from its recent two-week highs. This reflects a persistent slowdown in the U.S. currency against both major and minor rivals.

The retreat in the greenback is attributed to improved risk sentiment and cooling demand for safe-haven assets following reports from Axios that Iran—via Pakistani mediators—submitted a new proposal to the U.S. to reopen the Strait of Hormuz and end the war, while deferring nuclear negotiations.

Diplomatic Efforts

According to Axios, the new proposal aims at a de-escalation of the conflict. President Donald Trump stated on Sunday that Iran could "call" if they wish to negotiate an end to the two-month-old war, while maintaining a firm stance that the country will never possess a nuclear weapon.

Global Central Banks

Global market focus this week is centered on a series of critical central bank meetings to assess the war's impact on inflation and interest rate outlooks:

- Bank of Japan (BoJ): Expected to announce steady interest rates on Tuesday for the third consecutive meeting.

- Federal Reserve (Fed): Monetary policy decisions due on Wednesday.

- Bank of England (BoE) and European Central Bank (ECB): Decisions scheduled for Thursday.

Interest Rate Outlook

- Kevin Warsh, a nominee for a senior Federal Reserve position, clarified last week that he has not made any promises to Trump regarding rate cuts.

- According to the CME FedWatch Tool: The probability of the Fed keeping rates unchanged this week stands at 99%, with a 1% probability of a 25-basis-point hike.

The U.S. dollar stabilized on Monday as fluctuating hopes for a deal to end the Middle East conflict kept investors on edge ahead of a series of major central bank meetings this week. Meanwhile, the Japanese yen hovered near the critical 160 level against the dollar prior to the Bank of Japan's upcoming policy decision.

Cautious Optimism Over Talks

Market sentiment improved slightly following reports that Iran submitted a new proposal to the United States via Pakistani mediators. The proposal aims to reopen the Strait of Hormuz and end the war, while deferring nuclear negotiations.

However, analysts believe the nuclear file remains the primary obstacle, as any agreement that does not significantly alter Iran’s nuclear program could be politically costly for President Donald Trump domestically.

Dollar and Oil Dynamics

The dollar benefited from safe-haven flows when the war broke out in March, but it surrendered most of those gains this month as peace expectations rose. It has since stabilized as talks stalled.

- Brent crude futures rose 2.6% to $108 per barrel.

- The U.S. Dollar Index (DXY) fell 0.1% to 98.41.

- A key negotiation point remains Iran's demand for the lifting of economic sanctions.

Central Bank Watch: Fed and Beyond

The Federal Reserve is widely expected to keep interest rates unchanged this week. Chris Turner, Head of FX Strategy at ING, noted that the Fed might signal a need to keep rates "higher for longer," which could provide limited support to the dollar.

The Euro and Energy Exposure

The Euro rose from 1.15 toward 1.18 dollars after the early April ceasefire announcement. However, the Eurozone remains more vulnerable to energy price spikes than the U.S. due to its heavy reliance on oil imports. This puts pressure on the European Central Bank (ECB) to maintain a hawkish tone, even as rates are expected to stay on hold for now.

- The Euro edged up 0.1% to $1.1734.

Japan’s Intervention Risks

The yen rose 0.07% to 159.26 per dollar, remaining close to the 160 threshold that often triggers fears of government intervention.

- The Bank of Japan is expected to keep rates unchanged while signaling a readiness to hike later to combat energy-driven inflation.

- Gregor Hirt, Global CIO at Allianz Global Investors, noted that resuming Japan's rate-hike cycle depends heavily on geopolitical stability and the potential reopening of the Strait of Hormuz in the coming months.

Gold prices rose in the European market on Monday, extending gains for the second consecutive day and moving back above the $4,700 per ounce mark. This recovery is supported by a weakening U.S. dollar and renewed hopes for a diplomatic resolution to the Iranian conflict following reports of a new peace proposal.

Global markets are bracing for a pivotal week featuring meetings from several major central banks, as investors look to gauge the impact of the regional war on inflation and future interest rate trajectories.

Price Overview

- Gold Prices Today: Gold prices rose by 0.45% to ($4,730.13), from an opening level of ($4,709.26), after recording a daily low of ($4,672.26).

- At the close of Friday's trading, gold achieved a 0.35% increase, recovering from a nearly two-week low of $4,664.39 per ounce reached earlier that session.

- Over the past week, gold lost 2.5%, marking its first weekly decline in five weeks due to the escalation of tensions between the U.S. and Iran.

The U.S. Dollar

The dollar index fell by 0.25% on Monday, continuing its slide for the second session and pulling further away from its recent two-week highs. As the dollar weakens, gold becomes more affordable and attractive for buyers holding other currencies.

The retreat in the greenback is driven by improved risk appetite and cooling demand for safe-haven assets. This follows an Axios report stating that Iran—via Pakistani mediators—submitted a new proposal to the U.S. to reopen the Strait of Hormuz and end the war, while deferring nuclear negotiations to a later stage.

Diplomatic Efforts

President Donald Trump stated on Sunday that Iran can "call" if they wish to negotiate an end to the two-month-old war, while reiterating that the country will never be allowed to possess a nuclear weapon. This follows the reported Iranian peace overture, which has injected a dose of optimism into the markets.

Global Central Banks

Market focus this week shifts to a series of high-profile monetary policy meetings:

- Bank of Japan (BoJ): Decisions expected Tuesday; rates likely to remain steady for the third consecutive meeting.

- Federal Reserve (Fed): Monetary policy decisions due Wednesday.

- Bank of England (BoE) and European Central Bank (ECB): Decisions scheduled for Thursday.

U.S. Interest Rates

- Kevin Warsh, a nominee for a senior Federal Reserve role, clarified last week that he has made no promises to Trump regarding interest rate cuts.

- According to the CME FedWatch Tool: The probability of the Fed keeping rates unchanged this week stands at 99%, with only a 1% probability of a 25-basis-point hike.

Gold Performance Expectations

Kyle Rodda, an analyst at Capital.com, noted: "We are currently watching for any progress in the (U.S.-Iran) talks over the coming days, as this will be the biggest driver for the gold price." He added that the Federal Reserve's decision could either support or pressure gold, depending on whether they signal a "hold" for the rest of the year due to the inflationary energy crisis.

SPDR Fund

Gold holdings at the SPDR Gold Trust decreased by approximately 2.57 metric tons on Friday, marking the third consecutive daily decline. Total holdings fell to 1,046.62 metric tons, the lowest level since March 30.