Gold prices edged higher in European trading on Friday, maintaining gains for a third consecutive session near a four-week high and moving toward a seventh straight monthly advance, supported by safe-haven demand and a weaker US dollar in the foreign exchange market.

Although expectations for a Federal Reserve rate cut in March have declined, markets are waiting for further evidence on the direction of US monetary policy throughout this year.

Price Overview

• Gold prices today: Gold rose by 0.3% to $5,200.61 an ounce, up from the session open at $5,184.78, after touching an intraday low of $5,167.10.

• At Thursday’s close, gold gained 0.4%, marking a second consecutive daily increase and approaching a four-week high of $5,249.88 per ounce.

Monthly Performance

• Over the course of February — which officially concludes at today’s settlement — gold prices are up around 6.25%, on track for a seventh consecutive monthly gain, marking the longest winning streak in two years.

• The latest monthly rise is attributed to continued buying by central banks, institutions, and individual investors viewing the precious metal as a preferred alternative investment amid global geopolitical and economic tensions, as well as renewed concerns over US assets due to what markets see as unpredictable Trump policies.

US Dollar

The US dollar index declined by about 0.2% on Friday, reflecting weaker performance of the American currency against a basket of major and minor currencies.

This decline comes as the yield on the 10-year US Treasury fell to a three-month low amid increased demand for safe-haven assets, driven by renewed concerns about slowing global growth under the pressure of potential trade wars.

President Donald Trump’s State of the Union address in Congress added to market uncertainty, as it failed to provide sufficient reassurance regarding trade policy stability following the Supreme Court ruling that invalidated earlier tariffs.

US Trade Representative Jamieson Greer said on Wednesday that tariff rates on some countries could rise to 15% or more, compared with the recently imposed 10%, without specifying which trading partners would be affected or providing further details.

US Interest Rates

• Federal Reserve Governor Christopher Waller said he is open to keeping interest rates unchanged at the March meeting if February employment data indicates the labor market has “stabilized” after weak performance in 2025.

• According to CME Group’s FedWatch tool, markets currently price a 96% probability that interest rates will remain unchanged in March, with odds of a 25-basis-point cut at 4%.

• Investors continue to monitor incoming US economic data and comments from Federal Reserve officials to reassess these expectations.

Gold Outlook

ANZ market analyst Soni Kumari said there are two main factors supporting gold: ongoing uncertainty surrounding tariffs and the situation between Iran and the United States.

Linh Tran, senior market analyst at XS.com, said recent rounds of US-Iran talks failed to produce a clear outcome, keeping geopolitical risks present without leading to escalation.

Tran added that this has helped keep gold prices elevated, although it has not yet provided enough momentum to establish a sustainable upward trend.

SPDR Gold Trust

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 0.28 metric tons on Thursday — marking the fourth consecutive daily increase — bringing total holdings to 1,097.90 metric tons, the highest level since April 26, 2022.

The euro rose in European trading on Friday against a basket of global currencies, moving into positive territory versus the US dollar ahead of key inflation data from Germany, the largest economy in the euro area.

These figures are expected to provide further clues about the path of European interest rates this year, especially after Christine Lagarde emphasized that future monetary policy decisions will be data-dependent and assessed on a meeting-by-meeting basis rather than following a fixed path.

Price Overview

• Euro exchange rate today: the euro rose 0.15% against the dollar to $1.1813, from an opening level of $1.1797, recording a session low at $1.1789.

• The euro closed Thursday down 0.1% against the dollar, pressured by Lagarde’s testimony before the European Parliament in Brussels.

Christine Lagarde

ECB President Christine Lagarde delivered key remarks yesterday before the European Parliament’s Committee on Economic and Monetary Affairs, highlighting the following points:

• Efforts to reduce inflation are beginning to bear fruit, with headline inflation declining from 2.5% in January to 2.3% in February.

• Inflation is expected to stabilize around the ECB’s 2% target over the medium term, specifically by the first quarter of 2026.

• She defended the bank’s decision to keep interest rates unchanged, stressing that future decisions will depend on incoming data at each meeting, without pre-committing to a rate-cut path.

European interest rates

• Money markets are currently pricing a roughly 25% chance that the European Central Bank will cut rates by 25 basis points in March.

• Traders have shifted expectations from keeping rates unchanged throughout the year to pricing in at least one 25-basis-point rate cut.

• Investors are awaiting Germany’s February inflation data later today, which could reshape these expectations.

Outlook for the euro

Our expectation: if German inflation data comes in stronger than market forecasts, the probability of ECB rate cuts this year could decline, which would likely support further gains in the euro against a basket of global currencies.

The Japanese yen rose in Asian trading on Friday against a basket of major and secondary currencies, extending its recovery for a second consecutive session from a two-week low versus the US dollar, after data showed Tokyo core inflation rising at a pace above market expectations.

The currency was also supported by more hawkish remarks from Kazuo Ueda, Governor of the Bank of Japan, which opened the door for further monetary tightening in the country, as markets await more evidence on the timing of potential Japanese interest rate hikes.

Price Overview

• Japanese yen exchange rate today: the US dollar fell against the yen by 0.35% to 155.54 yen, from an opening level of 156.09 yen, recording a session high at 156.22 yen.

• The yen closed Thursday higher by 0.2% against the dollar, marking its first gain in the last three sessions, as part of a recovery from a two-week low at 156.82 yen.

Tokyo core inflation

Data released in Japan today showed that Tokyo’s core consumer price index rose 1.8% year-on-year in February, above market expectations of 1.7%, after recording a 2.0% increase in January.

Higher-than-expected price readings in Japan are likely to intensify inflationary pressure on monetary policymakers at the central bank, reinforcing the likelihood of additional Japanese interest rate hikes this year.

Kazuo Ueda

In an interview with the Yomiuri newspaper, Kazuo Ueda said that the bank’s baseline stance is to continue raising interest rates if the probability of achieving its economic and inflation forecasts increases.

Ueda added that the central bank will carefully review incoming data during the upcoming monetary policy meetings in March and April before deciding on any further rate increases.

He also pointed out that the outcome of this year’s annual wage negotiations could be a decisive factor. If wage gains come in stronger than expected and encourage companies to raise prices more quickly, the 2% inflation target could be achieved sooner than anticipated.

Ueda explained that core inflation has not yet sustainably reached the 2% target, but the bank will steer policy to ensure the goal is met without excessive overshooting, emphasizing that the bank is not “behind the curve” in addressing inflation risks.

Japanese interest rates

• Following the above data and comments, markets are pricing the probability of a quarter-point rate hike at the March meeting at around 15%.

• Pricing for a quarter-point rate hike at the April meeting stands near 45%.

• In the latest Reuters survey, the Bank of Japan is expected to raise interest rates to 1% by September.

• To reprice these expectations, investors are awaiting المزيد of data on inflation, unemployment, and wage growth in Japan.

Wheat prices rose during Thursday trading on the Chicago Board of Trade, supported by technical buying and strong demand for grains.

Saudi Arabia has issued a tender to purchase 655,000 metric tons of wheat, according to an announcement by the Saudi government authority responsible for grain procurement.

Delivery of the wheat is scheduled between May and July, according to the General Food Security Authority.

Market traders in Europe said the deadline for submitting price offers is February 27, with results expected to be announced on March 2.

Traders added that the shipments will be delivered عبر 11 maritime consignments, including one vessel to Jazan port, three shipments to Dammam, three to Yanbu, and four to Jeddah.

According to the details, up to 240,000 tons are requested for delivery to Jeddah between May 1 and July 15, 180,000 tons to Yanbu for arrival between May 15 and June 30, 180,000 tons to Dammam between May 1 and July 15, and 55,000 tons to Jazan between June 1 and June 15.

Traders noted that shipments to Jeddah, Dammam, and Yanbu were requested in batches of 60,000 tons each. They also indicated that final purchases could exceed the announced tender volume of 655,000 tons.

In its previous tender dated January 19, the authority purchased approximately 907,000 tons of hard wheat.

In trading activity, May wheat futures rose 0.7% to $5.74 per bushel at 19:20 GMT.