【Market Evening】Oil rises above $105 as supply concerns persist, Gold slips as dollar, yields strengthen on robust U.S. jobs data

—Germany said on Sunday that the West would agree to impose more sanctions on Russia in the coming days after Ukraine accused Russian forces of war crimes near Kyiv. 

—China expects sharp drop in holiday travel due to COVID outbreaks.

—Tesla delivers 310,048 electric vehicles in the first quarter; Chinese EV players Xpeng, Nio and Li Auto see car deliveries surge in March.

Gold slips as dollar rise 

Gold prices fell on Monday as the dollar and Treasury yields firmed after a solid U.S. payrolls report raised expectations of aggressive rate hikes, although the Ukraine crisis and talks of more sanctions against Russia supported safe-haven demand.

A stronger dollar makes gold less attractive for other currency holders, while higher yields increase the opportunity cost of holding non-paying bullion.

Spot gold was down 0.3% at $1,917.55 per ounce.

While the conflict in Eastern Europe may be providing a modest tailwind to gold prices on dips, it is very clear now that the main pricing inputs into gold have swung to the impact of higher U.S. yields and a higher U.S. dollar.

The dollar made a firm start to the week while Treasury yields were also higher, as the monthly U.S. jobs report indicated a strong labor market and is likely to keep the Federal Reserve on track to maintain its hawkish policy stance.

U.S. job data showed the unemployment rate falling to a new two-year low of 3.6% and wages re-accelerating, positioning the Fed to raise interest rates by a hefty 50 basis points in May.

Spot gold may fall to $1,898 as it has broken a support at $1,924 per ounce

Spot silver edged 0.2% lower to $24.57 per ounce, platinum was down 0.1% at $984.49, while palladium rose 1.3% to $2,306.19.

British financial regulators said on Monday that they would review the way the London Metal Exchange (LME) handled a halt in chaotic nickel trading last month and said the episode underlined questions about LME’s transparency.

The Financial Conduct Authority said it and the Bank of England would determine if further action should be taken.

“Events around the suspension and resumption of trading have underlined questions raised in a recent LME Discussion Paper on Market Structure, particularly the role of transparency in the LME and related markets,” the regulators said.

“The FCA has been in discussion with the LME on its proposals for some time and expects the LME to consider carefully how recent events should shape its future approach on market structure.”

Oil rises above $105

Oil prices gained about $1 on Monday as worries over tight supplies persisted after Germany warned of more sanctions on Russia and talks to revive the Iran nuclear deal paused.

Brent crude futures were up 94 cents, or 0.9%, at $105.33 a barrel and WTI crude was up 92 cents, or 0.9%. at $100.19.

Both contracts slipped $1 when markets opened on Monday but rebounded after Iran blamed the United States for pausing talks aimed at reviving their 2015 nuclear deal, which would allow a lifting of sanctions on Iranian oil supplies.

This added to concerns about tight supplies. Russian crude and oil products exports have been hit by Western sanctions and buyer aversion after Russia's invasion of Ukraine.

Germany said on Sunday that the West would agree to impose more sanctions on Russia in the coming days after Ukraine accused Russian forces of war crimes near Kyiv. Russia has rejected allegations of war crimes in what it calls a "special military operation" aimed at demilitarising Ukraine.

Estimates of the Russian oil supply loss range from 1 million to 3 million barrels per day (bpd), further tightening global markets that are already grappling with low inventories.

The United Nations has brokered a two-month truce between a Saudi-led coalition and the Houthi group aligned with Iran for the first time in the seven-year conflict. Saudi oil facilities have come under attack by the Houthis during the conflict.

In China, the world's top oil importer, demand concerns persist after its most populous city, Shanghai, extended COVID-19 lockdowns.

China's transport ministry expects a 20% drop in road traffic and a 55% fall in flights during the three-day Qingming holiday that starts on Sunday after a flare-up of COVID-19 cases in the country.

Dollar stabilizes; Euro falls 

The U.S. dollar stabilized Monday after last week’s strong jobs report, while the euro weakened as talk of additional sanctions on Russia for its invasion of Ukraine ramped up.

The Dollar Index, which tracks the greenback against a basket of six other currencies, traded marginally lower at 98.612.

USD/JPY rose 0.2% to 122.72, with the yen falling again, following the heavy beating the Japanese currency took in March on the expectation of higher U.S. interest rates while Japanese rates remained anchored at rock bottom.

Elsewhere, EUR/USD fell 0.1% to 1.1044, weighed by talk of fresh sanctions on Moscow after Ukraine accused Russian forces of war crimes in the town of Bucha, something denied by Russia's defense ministry. 

GBP/USD rose 0.2% to 1.3133, AUD/USD rose 0.2% to 0.7513 ahead of a Reserve Bank of Australia meeting on Tuesday.

Asian markets cautious amid talk of more Russia sanctions

Asian stock markets are trading mixed on Monday, following the broadly positive cues from Wall Street on Friday and as traders remain cautious amid worries about the economic impact of the ongoing Russian invasion of Ukraine and reports of related increasing sanctions on Russia by western countries. 

Nikkei 225 rose 0.25% to 27,736.47.

S&P/ASX 200 rose 0.27% to 7,513.70.

Hang Seng Index rose 2.10% to 22,502.31.

South Korea KOSPI rose 0.66% to 2,757.90.

European shares edged higher on Monday led by a rally in healthcare stocks, with investors keeping an eye out for more Western sanctions after Ukraine accused Russia of war crimes.

Sanctions imposed so far on the crude and basic materials producing country have sent prices of commodities soaring, fanning inflation fears. Data last week showed inflation in the European Union hit record highs, piling pressure on the European Central Bank to tighten policy.

Bitcoin, Dogecoin, Ethereum, Shiba Inu gain up to 5%

After a brief pause, cryptocurrencies were back in vogue, continuing late Sunday night action to Monday as well as the latest rise in equities boosted the morale of crypto assets.

All of the crypto tokens were trading higher during the early hours on Monday. Meme tokens including Dogecoin and Shiba Inu gained 5 per cent and 4 per cent, respectively. Cardano and BNB added up to 3 per cent each.

Bitcoin was trading half a per cent higher at $46,035. Ethereum fell 0.03% to $3486.5.

The Indian Ministry of Finance announced a 1% tax on all asset transfers above a certain size. The taxes will be imposed on July 1, 2022, yet the market is already panicking. A 30% flat tax on crypto income and digital assets investments has also been announced.

22:00(GMT+8): United States Factory Orders MoM (FEB);