Breaking: Gold surges and breaches $2,000/oz

The price of gold has just hit $2,000 in fast markets at the open of the week. 

The driver is oil and fears of global stagflation. Oil has surged 10% on Monday with the risk of the US and European ban on Russian products. There are also delays in Iranian talks. Brent was quoted $12.73 higher at $130.84, while US crude rose $9.92 to $125.60.

At the time of writing, it is being reported that US House Speaker Nancy Pelosi is exploring legislation that would ban Russian oil imports. This was a theme that roiled markets at the open. More on this here:

• Secretary of State Blinken: US is “looking” at banning Russian oil and gas, but need permission from EU

Pelosi said last Thursday that she supports banning Russian oil imports to the US. Biden has been reluctant to curb Russian oil shipments to the US or slap on energy sanctions with prices already hitting the pockets of US citizens. However, the sanction has already been backed by wide numbers of Republicans and an increasing number of Democrats.

Commodity prices in general are having their strongest start to any year since 1915. Among the many movers last week, nickel rose 19%, aluminium 15%, zinc 12%, and copper 8%, while wheat futures surged 60% and corn 15%.

This makes this week's US Consumer Price Index a key event for markets whereby an annual growth at 7.9%, and the core measure at 6.4% is feared ahead of the European Central Bank meeting this week and the Federal Reserve next week. The divergence between the two banks is fuelling the bid for the greenback which is competing with the price of gold as they both take to the moon.