Oil (BZ=F, CL=F)

Oil prices surged on Monday morning, after the Organization of the Petroleum Exporting Countries and its allies – known as OPEC+ – announced an increase to output for July that was in line with expectations.

Brent crude futures (BZ=F) jumped 2.6% to $64.39 a barrel, at the time of writing, while West Texas Intermediate futures (CL=F) were up 3% at $62.63 a barrel.

OPEC+ said in a statement on Saturday that its eight participating countries had agreed to increase output by 411,000 barrels per day.

Jim Reid, a market strategist at Deutsche Bank, said: "An increase of this magnitude was flagged on the wires on Friday afternoon and there was some prospect of it being higher than this.

He said that oil futures were higher on Monday morning "in a relief that the output increase wasn't higher."

ING's head of commodities strategy, Warren Patterson, and commodities strategist Ewa Manthey said: "The latest increase is in line with our expectations. We’re also assuming that OPEC+ will continue with these large supply hikes.

"Rising tensions between Russia and Ukraine added further support to the market this morning. Ukraine carried out large-scale drone attacks on several Russian airfields, which comes ahead of peace talks between Russia and Ukraine this week. In addition, some US senators are pushing for harder sanctions against Russia, with a proposal to impose 500% tariffs on imports from countries that buy Russian oil.

"While president Trump appears to be increasingly frustrated with president Putin, he’s so far been reluctant to impose additional sanctions. Actions that successfully target Russian oil flows will change the outlook for the oil market drastically."

NY Mercantile - Delayed Quote USD

(BZ=F)

65.39

(-0.37%)

As of 12:17:34 AM EDT. Market Open.

Advanced Chart

Gold (GC=F)

Gold prices also jumped on Monday morning, as the latest escalation in the Russia-Ukraine conflict and tariff concerns helped drive demand for the precious metal as a safe-haven investment.

Gold futures (GC=F) were up 1.9% at $3,379.50 per ounce at the time of writing, while the spot gold price climbed 1.9% to $3,352.32 per ounce.

Investors have been flocking to the yellow metal as it is considered to act as a hedge in times of political and economic uncertainty.

On Friday evening, US president Donald Trump announced that tariffs on imports of steel and aluminium would be doubled to 50% on Wednesday.

Deutsche Bank's Reid said: "It is really hard to keep up or predict what's going to happen on trade at the moment, and that's before we factor in the full ramifications from the court ruling last Thursday night, and then the subsequent brief stay of execution for them on appeal."

Stocks: Create your watchlist and portfolio

The US Court of International Trade last week ruled that Trump exceeded his authority when he used an emergency law to issue global reciprocal tariffs on US trading partners. However, an appeals court then ruled that the tariffs could remain in place for now.

"For now it seems likely that the tariff uncertainty will linger for a long time ahead even if we're still likely past the peak aggressiveness of US policy," said Reid.

In addition, Trump on Friday accused China of violating its trade truce with the US. Trump said in a post on his social media platform, Truth Social: "The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US."

On Monday, China responded by saying that the US had "severely violated" the terms of their recent trade truce.

Reid said that the "surprisingly positive agreement between China and the US on tariffs on May 12th now seems a more distant memory."

COMEX - Delayed Quote USD

(GC=F)

3,381.50

+(0.13%)

As of 12:19:06 AM EDT. Market Open.

Advanced Chart

Pound (GBPUSD=X, GBPEUR=X)

The pound gained against the dollar (GBPUSD=X) on Monday morning, rising 0.7% to $1.3547, helped by a weaker greenback.

The US dollar index (DX-Y.NYB), which measures the greenback against a basket of six currencies, was down 0.5% to 98.79 at the time of writing.

CCY - Delayed Quote USD

(GBPUSD=X)

1.3525

(0.00%)

As of 5:29:05 AM GMT+1. Market Open.

Advanced Chart

On trade, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "We’re back in a situation of one step forward, two steps back, but there do appear to be expectations that more concessions will be struck.

"Investors are getting used to aggressive statements being rolled back, so much so the TACO trade theory has rippled through Wall Street, which stands for ‘Trump Always Chickens Out’. But there’s no guarantee that the US president won’t follow through with more onerous restrictions, given he’s stayed steadfast to his pledge to bring more manufacturing back to the US."

In other currency moves, the pound was little changed against the euro (GBPEUR=X), trading at €1.186 at the time of writing.

More broadly, the FTSE 100 (^FTSE) edged 0.1% higher to trade at 8,785 points. For more details on broader market movements check our live coverage here.

CCY - Delayed Quote USD