Gold prices rose in European trading on Friday for the first time in the past three days, supported by relatively active safe-haven buying. Despite this rebound, the metal is still on track for a second consecutive weekly loss due to the broad strength of the US dollar in the foreign exchange market.

Higher energy costs have fueled concerns about accelerating inflation across most parts of the world and further reduced the likelihood of near-term interest rate cuts by the Federal Reserve. To reassess those expectations, investors are awaiting a series of key US economic data releases later today.

Price Overview

Gold prices today: gold rose 1.0% to $5,128.64, up from the session opening level of $5,079.62, after hitting a low of $5,061.80.

At Thursday’s settlement, gold fell 1.85%, marking its second consecutive daily loss due to the strength of the US dollar.

Weekly performance

Over the course of this week’s trading, which officially ends with today’s settlement, gold prices are down about 1.0% so far and are heading toward a second consecutive weekly loss.

US dollar

The dollar index rose 0.55% on Friday, extending gains for the fourth consecutive session and reaching a four-month high of 100.30 points, reflecting the continued broad strength of the US currency against a basket of global currencies.

As is widely known, a stronger US dollar makes gold, which is priced in dollars, less attractive to buyers holding other currencies.

The rally comes as investors continue buying the dollar as a preferred safe-haven asset, with the Iran war approaching its third week and fears growing that the conflict could widen across the Middle East. This has pushed energy prices sharply higher and increased negative pressure on the global economy.

Global oil prices

Oil prices surged sharply as Iran escalated attacks on oil facilities and transportation infrastructure across the Middle East, raising fears of a prolonged conflict and potential disruptions to global oil flows.

Iran’s new Supreme Leader, Mojtaba Khamenei, pledged on Thursday to keep the Strait of Hormuz closed. The Iranian military command warned the previous day that the world should prepare for oil prices reaching $200 per barrel after three more ships were attacked in the blockaded Gulf.

US interest rates

Amid rising oil prices, US President Donald Trump again called on Federal Reserve Chair Jerome Powell to cut interest rates.

According to the CME FedWatch tool from CME Group, markets are pricing a 99% probability that US interest rates will remain unchanged at the March meeting, while the probability of a 25-basis-point rate cut stands at 1%.

Markets are also pricing a 95% probability that rates will remain unchanged at the April meeting, while the probability of a 25-basis-point rate cut stands at 5%.

To reassess these expectations, investors are closely monitoring a series of important US economic data releases today, including fourth-quarter economic growth figures, January personal consumption expenditures, and job openings data for the end of January.

Gold outlook

Tim Waterer, chief market analyst at KCM Trade, said that inflation concerns and questions about the Federal Reserve’s ability to cut interest rates if oil prices continue rising are somewhat reducing gold’s appeal.

Analysts at Standard Chartered noted that gold coming under downward pressure for several weeks is not unusual when liquidity demand increases. They added that they maintain a positive long-term outlook and expect gold to resume its upward trend after the near-term profit-taking phase.

SPDR fund

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined by 1.43 metric tons on Thursday, bringing the total to 1,075.85 metric tons.

The euro fell in European trading on Friday against a basket of global currencies, deepening its losses for the fourth consecutive day against the US dollar and hitting its lowest level in four months. The single European currency is on track for a second straight weekly loss due to the global energy price crisis and its negative impact on the European economy.

The US currency continues to shine in the foreign exchange market as investors keep buying the dollar as the preferred safe-haven asset amid escalating military confrontations between the United States and Israel on one side and Iran on the other.

Price Overview

Euro exchange rate today: the euro fell 0.1% against the dollar to $1.1500, the lowest level since last November, from the session opening level of $1.1511, after reaching a high of $1.1530.

The euro ended Wednesday’s session down 0.5% against the dollar, marking its third consecutive daily loss due to renewed concerns about energy prices.

Weekly performance

Over the course of this week’s trading, which officially ends with today’s settlement, the euro has declined about 1% against the US dollar so far, heading for a second consecutive weekly loss.

Global energy prices

Energy prices, including oil and natural gas, have surged sharply as Iran escalated attacks on oil facilities and transportation infrastructure across the Middle East, increasing fears of a prolonged conflict and potential disruptions to energy flows.

Iran’s new Supreme Leader, Mojtaba Khamenei, pledged on Thursday to keep the Strait of Hormuz closed. The Iranian military command warned the previous day that the world should prepare for oil prices reaching $200 per barrel after three more ships were attacked in the blockaded Gulf.

Analysts at Wells Fargo said in a note that the euro faces a difficult situation. Europe’s natural gas storage refill season is approaching, and the European Union is preparing to start the season with record-low gas levels in storage, meaning it will need to purchase large volumes of energy immediately, with the risk of significantly higher prices.

US dollar

The dollar index rose more than 0.1% on Friday, extending gains for the fourth consecutive session and reaching a four-month high of 99.86 points, reflecting the continued strength of the US currency against a basket of global currencies.

The rally comes as investors continue buying the dollar as a preferred safe-haven asset, with the Iran war approaching its third week and fears growing that the conflict could widen across the Middle East. This has pushed energy prices sharply higher and increased negative pressure on the global economy.

European interest rates

Money markets currently price only a 5% probability that the European Central Bank will cut interest rates by 25 basis points at the March meeting.

Meanwhile, amid rising global energy prices, data from the London Stock Exchange Group (LSEG) suggests the European Central Bank could raise interest rates in June.

To reassess these expectations, investors are awaiting further economic data from the eurozone on inflation, unemployment, and wage levels.

The Japanese yen fell in Asian trading on Friday against a basket of major and minor currencies, deepening its losses for the fourth consecutive day against the US dollar and hitting its lowest level in 20 months. The currency is heading toward a fourth straight weekly loss as investors continue buying the US dollar as a preferred safe-haven asset amid escalating military confrontations in the Middle East.

Japanese authorities are closely monitoring movements in the domestic currency in the foreign exchange market, although the room for intervention appears more limited than in previous periods. This comes despite pressure pushing the yen toward the ¥160 per dollar level, which was previously viewed as a threshold that could trigger official intervention.

Price Overview

Japanese yen exchange rate today: the US dollar rose 0.25% against the yen to ¥159.68, the highest level since July 2024, up from the session opening level of ¥159.32, with a session low of ¥159.01.

The yen ended Thursday’s session down about 0.25% against the dollar, marking its third consecutive daily loss due to the escalation of the Iran war.

Weekly performance

Over the course of this week’s trading, which officially ends with today’s settlement, the Japanese yen has fallen about 1.25% against the US dollar so far, putting it on track for a fourth consecutive weekly loss.

US dollar

The dollar index rose more than 0.1% on Friday, extending its gains for the fourth straight session and reaching a four-month high of 99.86 points, reflecting the continued strength of the US currency against a basket of global currencies.

The rally comes as investors continue buying the dollar as a preferred safe-haven asset, with the Iran war approaching its third week and fears growing that the conflict could widen across the Middle East. This has pushed energy prices sharply higher and increased negative pressure on the global economy.

Global oil prices

Oil prices surged sharply as Iran intensified attacks on oil facilities and transportation infrastructure across the Middle East, increasing fears of a prolonged conflict and potential disruptions to global oil flows.

Iran’s new Supreme Leader, Mojtaba Khamenei, pledged on Thursday to keep the Strait of Hormuz closed. The Iranian military command had already warned the previous day that the world should prepare for oil prices reaching $200 per barrel after three more ships came under attack in the blockaded Gulf.

Analysts said the International Energy Agency’s proposal to release 400 million barrels from oil reserves — a record amount — would not be sufficient to ease fears of supply disruptions from the Middle East.

Japanese authorities

Finance Minister Satsuki Katayama avoided giving a direct answer on Friday when asked about the possibility of intervening in the currency market, saying the government is ready to act at any time “while considering the impact that currency movements may have on citizens’ livelihoods.”

Katayama told parliament earlier this week that Japan had “strongly urged” its Group of Seven counterparts to hold a meeting to discuss measures to address rising oil prices, referring to discussions that resulted in an agreement to consider releasing emergency strategic oil reserves.

Shota Ryu, a foreign exchange strategist at Mitsubishi UFJ Morgan Stanley Securities, said that if Japan intervenes now, the impact may be limited because dollar buying as a safe haven is likely to continue unless the situation in the Middle East stabilizes.

Ryu added that intervention could even encourage speculators to sell the yen again once it rebounds.

Japan justifies intervention in the foreign exchange market based on an agreement among the advanced G7 economies allowing authorities to intervene to counter excessive volatility caused by speculative moves that deviate from economic fundamentals.

Japanese interest rates

Markets currently price a 5% probability that the Bank of Japan will raise interest rates by a quarter point at the March meeting, while the probability of a quarter-point hike in April stands at 35%.

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

Analysts from Morgan Stanley and MUFG wrote in a joint research report that while the probability of a rate hike in March or April had already been considered low, the growing uncertainty surrounding developments in the Middle East makes it more likely that the Bank of Japan will adopt a more cautious stance, reducing the chances of near-term rate increases.

To reassess these expectations, investors are awaiting further economic data on inflation, unemployment, and wages in Japan.

Most cryptocurrencies declined during Thursday’s trading as risk appetite weakened amid the escalating impact of the war and military operations between the United States and Iran, particularly on global energy supplies.

Two tankers reportedly caught fire in Iraqi waters in a clear escalation of Iranian attacks that have disrupted energy supplies in the Middle East, pushing oil prices sharply higher during the day.

Iran’s new Supreme Leader, Ayatollah Mojtaba Khamenei, renewed threats of retaliation for what he described as the “blood of martyrs,” while confirming that the Strait of Hormuz would remain closed and that attacks on US bases would continue.

As oil prices rose above $100 per barrel due to the Iran war, the closure of the Strait of Hormuz, and supply disruptions, concerns have increased that inflation could rise significantly in the United States, raising the possibility of a 1970s-style stagflation scenario.

US Energy Secretary Chris Wright told CNBC that the US Navy is “not ready” at this time to escort oil tankers through the Strait of Hormuz, while also ruling out the possibility of oil prices rising to $200 per barrel.

Government data released today showed that initial US jobless claims fell slightly to 213,000 last week, compared with expectations that they would remain unchanged at 214,000.

Investors are now pricing in only one Federal Reserve interest rate cut of 25 basis points this year, compared with expectations of two cuts before the Middle East conflict erupted.

In trading, Ripple fell 1.2% to $1.37 as of 20:46 GMT on the CoinMarketCap platform.