Gold prices rose in the European market on Thursday, attempting to recover from a seven-month low and heading toward their first gain in three days, with buying activity from lower levels and attempts to trade above $4,000 per ounce again.

This rise is supported by a pause in the US currency’s advance against a basket of global currencies, as investors await important US Personal Consumption Expenditures data, which will provide crucial clues about the Federal Reserve’s interest rate path this year.

The Price

• Gold prices today: Gold prices rose 0.5% to $4,018.719, from the opening level of $3,999.28, and recorded a low of $3,963.18.

• At Wednesday’s settlement, gold prices lost 2.75%, marking their second consecutive daily loss, and recorded a seven-month low of $3,959.49 per ounce, due to pressure from the rising US dollar.

US dollar

The US Dollar Index fell about 0.15% on Thursday, retreating from a 13-month high of 101.80 points, reflecting a pause in the US currency’s advance against a basket of global currencies.

Aside from profit-taking, the US dollar is retreating as investors refrain from building new long positions ahead of the release of the US Personal Consumption Expenditures report for May, the Federal Reserve’s preferred inflation gauge.

Consumer spending data, along with comments from some Federal Reserve officials, are expected to provide crucial clues about the likelihood of at least one US interest rate hike this year.

US interest rates

• Chicago Federal Reserve President Austan Goolsbee said that with the labor market stable, he is focused on determining whether elevated inflation will remain that way or ease as the impact of higher tariffs fades, and if a solution is reached to the Middle East conflict.

• According to CME Group’s FedWatch Tool, pricing for the Federal Reserve to leave interest rates unchanged at the July meeting currently stands at 66%, while pricing for a 25-basis-point rate hike stands at 34%.

• Pricing for the Federal Reserve to leave interest rates unchanged at the December meeting currently stands at 16%, while pricing for a 25-basis-point rate hike stands at 84%.

Gold outlook

• Matt Simpson, senior analyst at StoneX, said: Gold is seeing bearish momentum this week because of the strength of the US dollar.

• Nikos Tzabouras, senior market analyst at Tradu.com, said: The Federal Reserve’s hawkish shift, which led to a repricing of rate hike expectations, remains the main factor behind the weakness in gold prices.

SPDR Fund

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 4.27 metric tons on Wednesday, marking the second consecutive daily decline, bringing the total down to 1,013.36 metric tons, the lowest level since June 17.

The euro rose in European trading on Thursday against a basket of global currencies, attempting to recover from a 13-month low against the US dollar and heading toward its first gain in four sessions, supported by buying activity from lower levels and a pause in the US dollar's advance ahead of the release of the US Personal Consumption Expenditures report.

Amid falling oil prices, inflationary pressures on policymakers at the European Central Bank are easing, reducing the likelihood of another European interest rate hike this year.

The Price

• Euro exchange rate today: The euro rose more than 0.1% against the US dollar to $1.1371, from today's opening level of $1.1358, and recorded a session low of $1.1348.

• The euro ended Wednesday down 0.2% against the dollar, marking its third consecutive daily loss and touching a 13-month low of $1.1325 amid heavy selling across most global currencies against the US currency.

US dollar

The US Dollar Index fell about 0.5% on Thursday, retreating from a 13-month high of 101.80 points and reflecting a pause in the US currency's rise against a basket of major and secondary currencies.

In addition to profit-taking activity, the dollar is easing ahead of the release of the US Personal Consumption Expenditures report for May, the Federal Reserve's preferred inflation gauge.

Consumer spending data, along with comments from several Federal Reserve officials, are expected to provide crucial clues about the likelihood of at least one US interest rate hike this year.

Global oil prices

Global oil prices fell around 1% on Thursday, extending losses for a fourth consecutive session and hitting four-month lows amid expectations of smoother crude flows through the Strait of Hormuz.

There is little doubt that lower global oil prices reduce concerns about accelerating inflation, supporting the case for the European Central Bank to leave monetary policy tools unchanged for an extended period this year.

European interest rates

• Reports: The European Central Bank is considering pausing monetary policy normalization in July if energy prices remain at current levels.

• Money markets continue to price the probability of a 25-basis-point European interest rate increase in July at around 30%.

• To reassess those expectations, investors are awaiting additional eurozone data on inflation, unemployment, and wages.

Opinions and analysis

Brent Donnelly, President of Spectra Markets, said: "Further gains for the US dollar require a wider interest rate differential, but in the short term companies still need dollars, and that demand is likely to persist for several more days."

He added: "I believe this creates a positive feedback loop for the US dollar, as speculators continue adding new long positions alongside breaks of key technical levels, but that loop is likely to lose momentum and begin fading soon."

The Australian dollar rose in Asian trading on Thursday against a basket of global currencies, attempting to recover from a two-month low against its US counterpart, with moderate buying activity emerging from lower levels following the release of positive Australian labour market data.

The data showed stronger-than-expected growth in new Australian jobs in May, while the unemployment rate retreated from a four-and-a-half-year high, indicating that Australia's labour market is beginning to regain momentum. This could pave the way for the Reserve Bank of Australia to raise interest rates again later this year.

The Price

• Australian dollar exchange rate today: The Australian dollar rose 0.2% against the US dollar to 0.6908, from today's opening level of 0.6894, and recorded a session low of 0.6888.

• The Australian dollar ended Wednesday's trading down about 0.25% against the US dollar, marking its third consecutive daily loss and touching a two-month low of 68.83 US cents, as investors continued to favour the US dollar as the most attractive available investment.

Australian labour market

Figures released by the Australian Bureau of Statistics on Thursday showed net employment increased by 40.3 thousand jobs in May, the strongest pace of job creation since February and above market expectations of a 31.2 thousand increase. In April, employment had declined by 40.7 thousand after being revised lower from a previously reported decline of 18.6 thousand.

Government data also showed the unemployment rate fell to 4.4%, in line with market expectations of 4.4%, after reaching 4.5% in April, its highest level since November 2021.

The data suggests tighter conditions may be returning quickly to Australia's labour market, potentially renewing pressure on policymakers at the Reserve Bank of Australia and strengthening expectations for another Australian interest rate hike later this year.

Australian interest rates

• Following the data release, market pricing for a 25-basis-point interest rate increase by the Reserve Bank of Australia in August remained around 20%.

• To reassess those expectations, investors are awaiting further Australian data on inflation, unemployment, and wages.

Opinions and analysis

Russell Chesler, Head of Investments at VanEck, said: "This is not the clear slowdown signal that markets were hoping for. For an economy that is supposedly losing momentum, Australians are still working and still spending."

He added: "We remain data dependent, but our view is that there could be another interest rate increase during this cycle."

Ethereum traded near the $1,672 level, according to market data from Crypto News, with the cryptocurrency falling 1.16% over the past 24 hours and 6.48% over the past seven days, while daily trading volume reached approximately $9.23 billion. Ethereum traded between $1,642 and $1,692 during the same period.

More hawkish Fed policy

At the same time, expectations for higher US interest rates have increased as Federal Reserve officials adopt a more hawkish tone amid continued economic strength.

Tensions surrounding the framework agreement between the United States and Iran have also supported demand for safe-haven assets after disagreements emerged over several key issues.

According to the CME FedWatch Tool, markets are currently pricing in a 36% probability of a Federal Reserve rate hike at the July meeting, up from 9% a week ago.

For September, the probability of a rate hike has climbed to more than 70%, compared with 29% previously.

The latest move has kept Ethereum below the $1,750 zone, an area traders have been monitoring since the cryptocurrency's February low. Analyst Dan Crypto Trades said Ethereum has repeatedly failed to break above this level and needs to establish a higher low before attempting another move higher.

Trader Dan Crypto Trades said: "Buyers need to try to form a higher low around this area and then break through it on the next attempt."

The zone is currently acting as a short-term test for buyers. If Ethereum fails to recover and hold above $1,750, the market could revisit the $1,500 area, which has already attracted attention from several analysts.

Ali Charts noted that Ethereum has moved below its 200-hour simple moving average. This signal often points to short-term trend weakness when price fails to reclaim the average quickly.

Cryptocurrency analyst Ali Martinez said: "Ethereum is now trading below the 200-hour simple moving average. As long as that level remains lost, I believe $1,580 remains the next major target."

ETF outflows and Iran risks weigh on Ethereum

According to data from SoSoValue, spot Ethereum ETFs recorded net outflows of $82.351 million yesterday, marking the fourth consecutive day of net withdrawals.

Those outflows added pressure on Ethereum as the cryptocurrency continues to struggle to maintain levels above short-term resistance.

As previously reported by Crypto News, Ethereum recently fell below the $1,700 level as ETF outflows, weak Relative Strength Index (RSI) readings, Iran-related risks, and declining derivatives activity weighed on market sentiment.

The report noted that traders remained cautious as both institutional flows and futures market activity weakened.

The broader global macroeconomic backdrop also remained tense. The Kobeissi Letter reported that US President Donald Trump criticized a Senate vote on Iran-related War Powers legislation, calling it "poorly timed and meaningless."

Geopolitical risks could reduce investor appetite for high-volatility assets, including cryptocurrencies, as traders shift toward safer positions.

Ethereum briefly reclaimed a resistance zone near $1,733 earlier this week after rebounding from $1,704, but the recovery failed to gain traction.

Since then, Ethereum has fallen back below the area that buyers needed to defend in order to maintain bullish momentum.