Gold prices climbed by approximately 2% in the European market on Thursday, on track for their first gain in four days. This recovery comes as buyers move in at lower levels following a drop to a four-week low, further supported by a slight retreat of the U.S. dollar in the foreign exchange market.

In line with global market expectations, the Federal Reserve kept interest rates unchanged for the third consecutive meeting, while warning of elevated inflation driven by surging energy prices.

Price Overview

• Gold Prices Today: Gold rose by about 2.0% to ($4,629.73), from an opening level of ($4,543.95), after hitting a session low of ($4,539.48).

• At Wednesday's close, gold prices lost roughly 1.2%, marking a third consecutive daily decline and hitting a four-week low of 4,510.32 dollars per ounce due to the rise in the dollar, oil, and a hawkish Federal Reserve meeting.

The U.S. Dollar

The dollar index fell 0.25% on Thursday, retreating from a nearly three-week high and heading toward its first loss in three sessions. This reflects a cooling of the American currency against a basket of major and minor rivals.

Beyond profit-taking, the U.S. dollar is softening as diplomatic efforts continue to bridge views between the United States and Iran in hopes of a permanent peace agreement to reopen the Strait of Hormuz.

The Federal Reserve

At the conclusion of its third monetary policy meeting of the year, and in line with most forecasts, the Federal Reserve on Wednesday kept interest rates unchanged for the third consecutive meeting.

The Federal Open Market Committee (FOMC) voted 8 to 4 to maintain the benchmark federal funds rate at the 3.50% to 3.75% range, the lowest level since September 2022. The vote saw the most significant internal opposition within the Fed since 1992, as some members no longer see a need for the central bank to maintain a dovish tilt.

The policy statement noted that inflation remains "elevated" above the 2% target, impacted by rising energy and shipping costs resulting from the naval blockade on Iran and the closure of the Strait of Hormuz.

In his final press conference, Fed Chair Jerome Powell admitted that the conflict in the Middle East has created "new inflationary pressures" that were not anticipated. However, he stressed that the Fed would not hesitate to raise rates again if oil prices continue to climb. Powell expressed pride in the resilience of the U.S. economy against geopolitical shocks, maintaining that a "soft landing"—reducing inflation without a recession—remains possible.

Powell also sent an implicit message to his designated successor, Kevin Warsh, regarding the necessity of maintaining "central bank independence" from political pressure (a reference to Trump's frequent calls for rate cuts).

U.S. Interest Rates

• Following the meeting, according to the CME FedWatch Tool: The probability of keeping rates unchanged at the June meeting is currently priced at 99%, with a 1% probability of a 25-basis-point cut.

• To refine these probabilities, investors are closely monitoring upcoming U.S. economic data and further comments from Federal Reserve officials.

Gold Performance Forecast

Tim Waterer, chief market analyst at KCM Trade, stated: "Gold represents a valuable investment opportunity for traders at current levels. Therefore, dip-buying is playing a role in gold's recovery efforts today." Waterer added: "While gold is attempting a slight bounce from oversold levels, rising oil prices and the resulting new inflation risks are limiting its near-term upside."

SPDR Fund

Gold holdings at the SPDR Gold Trust decreased by 1.71 metric tons on Wednesday, marking the sixth consecutive daily decline. Total holdings fell to 1,039.20 metric tons, the lowest level since November 4, 2025.

The Euro fell in the European market on Thursday against a basket of global currencies, deepening its losses for the third consecutive day against the U.S. dollar. The currency hit a three-week low as risk aversion persists among investors, who continue to favor the American dollar as the primary alternative investment due to reports that the U.S. is considering a sustained naval blockade on Iran.

The European Central Bank (ECB) concludes its third periodic monetary policy meeting of 2026 later today. Markets widely expect interest rates to remain on hold for the seventh consecutive meeting, while looking to the upcoming statement for further signals regarding the future path of interest rates this year.

Price Overview

• Euro Exchange Rate Today: The Euro fell against the dollar by approximately 0.2% to ($1.1655), the lowest since April 9, from an opening price of ($1.1676), after recording a session high of ($1.1689).

• The Euro ended Wednesday's trading down 0.3% against the dollar, marking its second daily loss following U.S. military threats of limited strikes on Iran and a hawkish Federal Reserve meeting.

The U.S. Dollar

The dollar index rose 0.15% on Thursday, extending gains for the third consecutive session to reach a three-week high. This reflects the ongoing ascent of the American currency against a basket of major and minor rivals.

This rise is driven by investors focusing on the U.S. dollar as a safe haven amid escalating fears that current peace talks between the U.S. and Iran have reached a deadlock, alongside the increasing likelihood of renewed military confrontations in the Middle East.

Efforts to end the war have hit an impasse, with Donald Trump expressing dissatisfaction with Tehran's latest proposal. The U.S. President insists on addressing the nuclear file as a core component of any peace agreement. Furthermore, President Trump discussed ways to limit the repercussions of the U.S. blockade on Iranian ports—which could extend for several months—with major oil companies to ensure supply stability and reduce pressure on global energy markets.

Global Oil Prices

Oil prices continue to climb in global markets, with Brent crude reaching its highest level in six weeks amid fears of prolonged supply disruptions as the Strait of Hormuz remains closed.

Media reports suggest that the U.S. military will brief Trump later today on potential measures against Iran, which may include "short and powerful" military strikes targeting Iranian infrastructure.

European Central Bank

The ECB concludes its third monetary policy meeting of 2026 later today. Expectations are currently stable for keeping European interest rates unchanged at 2.15%, the lowest level since October 2022, marking the seventh consecutive meeting without a change.

The interest rate decision and policy statement are due at 12:15 GMT, followed by a press conference with ECB President Christine Lagarde at 12:45 GMT.

Euro Performance Forecast

We at "Economies.com" expect that if the ECB’s comments come in less aggressive than market expectations, the probability of European interest rate hikes this year will decline. This would likely deepen the Euro's losses against a basket of global currencies.

The Japanese yen rose in the Asian market on Thursday against a basket of major and minor currencies, attempting to recover from a two-year low against the U.S. dollar. This rebound is driven by buying activity at lower levels, alongside increasing expectations of intervention by Japanese authorities after the local currency traded below the 160 yen threshold.

Despite today's gains, the Japanese currency is on track to suffer its third consecutive monthly loss, as investors prioritize the U.S. dollar as the preferred alternative investment amid escalating tensions between the United States and Iran.

Price Overview

* Japanese Yen Exchange Rate Today: The dollar fell against the yen by more than 0.2% to (160.07¥), from an opening price of (160.43¥), after recording a session high of (160.44¥).

* The yen ended Wednesday's trading down 0.5% against the dollar, marking its second consecutive daily loss. It hit a two-year low of 160.47 yen following U.S. military threats to launch limited strikes on Iran and a hawkish Federal Reserve meeting.

Japanese Authorities

Finance Minister Satsuki Katayama reiterated warnings that the Japanese government stands ready to take "decisive and strong measures" to counter excessive currency market movements. Authorities confirmed they are on high alert and "ready to respond 24 hours a day" during the current "Golden Week" holiday period to prevent any sudden collapses.

Analysts at IG noted in a memo: "Although the USD/JPY pair has entered intervention territory, Japanese authorities will be cautious about intervening too early given Japan's vulnerability as a major energy importer and the current deadlock in the Middle East."

Japanese Interest Rates

* Market pricing for a quarter-point interest rate hike by the Bank of Japan (BoJ) at the upcoming June meeting remains stable at around 75%.

* Investors are awaiting further data on inflation, unemployment, and wages in Japan to refine these expectations.

Monthly Performance

* Throughout April's trading, which officially concludes with today's price settlement, the yen is currently down approximately 1.0% against the U.S. dollar, poised for its third consecutive monthly loss.

* These monthly losses are attributed to investors favoring the U.S. dollar as a safe haven due to the repercussions of the Iranian war and the continued escalation of tensions between Washington and Tehran.

Oil prices surged by more than 6% on Wednesday after U.S. President Donald Trump stated he would maintain the American naval blockade on Iran until it agrees to a nuclear deal.

Global benchmark Brent crude futures jumped over 6% to reach 118.33 dollars per barrel by 12:10 p.m. ET, while U.S. West Texas Intermediate (WTI) futures also climbed more than 6% to 106.37 dollars per barrel.

Trump told Axios on Wednesday: "The blockade is somewhat more effective than bombing. They are choking like a stuffed pig, and it's going to get worse for them. They cannot have a nuclear weapon."

He added that "attempts to continue negotiations to end the war have stalled in recent days."

For its part, Iran has refused to reopen the Strait of Hormuz unless the United States lifts the blockade. Tehran's control over the Strait has effectively choked oil exports from the Middle East.

Energy market traders also continue to assess the implications of the United Arab Emirates' surprise decision to withdraw from OPEC, though analysts suggest the impact remains limited as long as the Middle East crisis persists.

Strategists at the Dutch bank ING noted in a research memo issued Wednesday that the UAE's exit from the group of oil-producing nations represents a "major blow" to OPEC. They suggested Trump might welcome the move as it "weakens OPEC's influence in the oil market and could be beneficial for importers and consumers."

They added: "The primary driver for oil prices in the near term remains tied to developments in the Gulf and the timing of the resumption of oil flows through the Strait of Hormuz."