Gold prices fell in European trading on Monday, extending losses for the second consecutive session and moving further away from their all-time highs, as profit-taking and corrective activity dominated the market.

Prices were also pressured by improving risk appetite in global financial markets, amid easing trade tensions between Beijing and Washington and fading concerns over US regional banks.

Price Overview

• Gold prices fell by 0.75% to 4,219.21 dollars per ounce, down from an opening level of 4,251.70 dollars, after hitting an intraday high of 4,274.67 dollars.

• On Friday, gold lost 1.75%, marking its first decline in six sessions and the biggest one-day drop since May 14, as profit-taking accelerated after the metal hit a new all-time high of 4,379.65 dollars earlier in the session.

• Last week, gold gained 5.8%, posting its ninth consecutive weekly advance — the longest winning streak since June 2020.

Improved Risk Appetite

Most global stock markets rose at the start of the week as risk appetite improved amid easing trade tensions between Beijing and Washington and declining fears about US regional banks.

US President Donald Trump said on Friday that imposing “comprehensive” tariffs on China would not be sustainable.

Gold Outlook

• Independent metals analyst Tai Wong said, “I think Trump’s more conciliatory tone since the initial 100% tariff announcement has helped ease market tensions.”

• Suki Cooper, Global Head of Metals Research at Standard Chartered Bank, stated, “We expect gold to average 4,488 dollars in 2026 and see further upside risks due to broader structural factors supporting the market.”

• HSBC raised its 2025 average gold price forecast by 100 dollars to 3,455 dollars per ounce and projected that gold could reach 5,000 dollars per ounce in 2026.

SPDR Fund

Holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 12.59 metric tons on Friday, marking the sixth consecutive daily increase and bringing total holdings to 1,047.21 metric tons — the highest level since June 30, 2022.

The euro rose in European trading on Monday against a basket of global currencies, resuming its advance after a brief pause on Friday against the US dollar and moving once again toward its two-week high as political tensions in France — the eurozone’s second-largest economy — continued to ease.

The government of Prime Minister Sébastien Lecornu survived two no-confidence votes in the French Parliament last week, buoyed by renewed support following his decision to suspend the controversial 2023 pension reform until after the 2027 presidential election.

Price Overview

• The euro rose 0.2% to 1.1674 dollars from an opening level of 1.1651 dollars, after touching a session low of 1.1650 dollars.

• On Friday, the euro fell 0.3% against the dollar — its first decline in four sessions — due to profit-taking after reaching a two-week high of 1.1728 dollars earlier in the day.

• For the week, the euro gained 0.3% against the dollar, marking its second weekly rise in three weeks, supported by improving political sentiment in France.

US Dollar

The dollar index fell 0.15% on Monday, resuming its decline after Friday’s temporary rebound from a two-week low, reflecting renewed weakness in the US currency against a basket of global peers.

The retreat comes as markets now fully price in two interest-rate cuts by the Federal Reserve in October and December, aimed at halting the continued deterioration in the US labor market.

Political Developments in France

Prime Minister Sébastien Lecornu announced last week the suspension of the 2023 pension reform until after the 2027 presidential election — a move intended to ease political and social tensions following strong opposition from left-wing lawmakers who warned that pressing ahead with the reform could destabilize the new government.

The decision allowed Lecornu to survive two no-confidence votes in Parliament, giving his administration temporary breathing space and an opportunity to present a new budget for Europe’s second-largest economy.

Analysts see the move as a shift toward less-austere fiscal policies compared with the previous government, signaling Lecornu’s intent to calm public discontent and strengthen confidence in his young administration.

European Interest Rates

• Money-market pricing for a 25-basis-point rate cut by the European Central Bank in October remains below 10%.

• Traders have scaled back bets on further monetary easing, indicating that the current rate-cutting cycle is likely over for this year.

• Investors now await upcoming European economic data and comments from ECB officials for clues on the future policy path.

The Japanese yen fell in Asian trading on Monday against a basket of major and minor currencies, extending its losses for the second consecutive day against the US dollar and retreating from its two-week high amid ongoing profit-taking and market correction. The decline also follows key political developments in Japan that bring Sanae Takaichi significantly closer to becoming the country’s next prime minister.

Takaichi, known for her support of fiscal and monetary stimulus, has now become the near-certain frontrunner for Japan’s top political post after reportedly securing crucial political backing.

According to Kyodo News, the ruling Liberal Democratic Party (LDP) led by Takaichi and the Japan Innovation Party will formalize an alliance on Monday, ahead of the parliamentary vote for prime minister scheduled for Tuesday.

Price Overview

• USD/JPY rose 0.4% to 151.20 yen, up from an opening of 150.62 yen, after touching an intraday low of 150.34 yen.

• The yen ended Friday’s session down 0.15% versus the dollar — its first loss in four sessions — as investors took profits after the currency had reached a near two-week high of 149.37 yen earlier in the day.

• For the week, the yen gained about 0.35% against the dollar, marking its second weekly rise in the past three weeks amid ongoing political uncertainty in Japan.

Political Developments

Kyodo reported that the ruling Liberal Democratic Party and the Japan Innovation Party are preparing to formally strengthen their alliance on Monday — a move aimed at securing a parliamentary majority ahead of Tuesday’s vote to select Japan’s next prime minister.

Sanae Takaichi, who is on track to become Japan’s first female prime minister, had faced a major political setback earlier this month when the LDP’s longtime coalition partner, Komeito, abruptly withdrew after a 26-year alliance.

However, the new partnership with the right-leaning Japan Innovation Party could give Takaichi a powerful boost toward leadership, as both parties share common views on economic and defense policy — including support for loose monetary policy and higher defense spending to strengthen Japan’s military capabilities.

Improved Risk Appetite

The yen also weakened as demand for safe-haven currencies eased, with global risk sentiment improving amid signs of easing trade tensions between Beijing and Washington and reduced concerns about US regional banks.

Japanese Interest Rates

• Bank of Japan Governor Kazuo Ueda said last week that the central bank remains prepared to raise its key interest rate if the outlook for growth and inflation continues to improve.

• Following Ueda’s comments, market pricing for a 25-basis-point rate hike at the October meeting rose from 25% to 35%.

• Yen swap markets now indicate a 50% chance of a rate hike by December, up from 41% prior to Ueda’s remarks.

• Investors are awaiting further data on Japan’s inflation, unemployment, and wage growth to reassess these expectations.

Ripple’s price declined on Friday along with most major cryptocurrencies, suffering steep weekly losses as risk appetite weakened and investors moved to liquidate portions of their crypto holdings.

The drop followed comments from US President Donald Trump, who said that the 100% tariffs imposed on China would not be sustainable.

Meanwhile, growing anxiety in the US banking sector has added to the cautious sentiment after two auto companies filed for bankruptcy in recent weeks, raising concerns about lax lending standards — particularly in the opaque private credit market.

Regional banks Zions and Western Alliance reported significant losses tied to poor-quality loans.

JP Morgan CEO Jamie Dimon commented during the bank’s earnings conference this week, saying, “When you see one cockroach, there are usually more,” referring to the collapses of First Brands and Tricolor Holdings.

The downturn comes as the US government shutdown entered its 17th day, with no signs of resolution. Treasury Secretary Bessent stated that the shutdown is costing the US economy about 15 billion dollars per day.

Elsewhere, Federal Reserve Board member Steven Miran said on Friday that two additional rate cuts this year appear realistic amid what he described as a sharp slowdown in inflation.

Miran also noted that while he would prefer a 50-basis-point rate cut at this month’s meeting, he expects the central bank to opt for a smaller 25-basis-point reduction instead.

Ripple seeks to raise $1 billion to repurchase XRP tokens

Bloomberg reported on Friday that Ripple Labs — the issuer of the XRP cryptocurrency — is leading efforts to raise one billion dollars to establish a reserve of its own digital tokens.

Although such moves typically support prices, XRP showed little positive reaction, falling 3.7% to 2.3385 dollars, hovering near its lowest level in 11 months — a level reached during last week’s sharp market crash.

Bloomberg added that the funding will be arranged through a special-purpose acquisition company (SPAC), with Ripple contributing part of its existing XRP reserves to the new fund.

As of 21:07 GMT, XRP was down 1.1% at 2.30 dollars, marking a 14.4% weekly loss.