Gold prices rose in European trade on Monday, extending losses for the second straight session and recovering from a two-week trough, as the dollar lost ground.

Eyes are focused on the Federal Reserve’s policy meeting this week, expected to hold interest rates unchanged for the third meeting in a row while providing clues on the future of interest rates this year.

The Price

Gold prices rose 1% today to $3272 an ounce, with a session-low at $3237.

On Friday, gold rose 0.1%, the first profit in four days away from a two-week trough at $3202.

The precious metal slid 2.4% last week, the second weekly loss in a row on profit-taking away from a record high.

The Dollar

The dollar index fell 0.4% on Monday against a basket of major rivals today.

It comes on profit-taking away from three-week highs, while investors shun new positions before new developments in the US-China trade talks.

The Fed

Tomorrow, the Federal Reserve will convene and discuss monetary policies, expected to hold interest rates unchanged.

The Fed’s monetary statement and Chair Powell’s subsequent press conference will likely provide clues on the path ahead for policies.

US President Donald Trump continued to pressure Powell to cut interest rates, however he said won’t fire him before the end of term in May 2026.

US Rates

Several Fed officials don’t believe there’s an urgent need to review monetary policies soon.

According to the Fedwatch tool, the odds of a Fed 0.25% rate cut in May stood at just 8%.

The odds of such a cut in June stood at a healthier 65%.

SPDR

Gold holdings at the SPDR Gold Trust fell 1.15 tons on Friday to a total of 944.26 tons.

The euro rose in European trade on Monday on track for the second straight profit against the dollar, amid renewed inflationary pressures on the European Central Bank’s policymakers.

The pressures hurt the odds of an ECB interest rate cut in June as investors await more clues on the path ahead for monetary policies.

The Price

The EUR/USD price rose 0.4% today to $1.1347, with a session-low at $1.1294.

The pair closed up 0.1% on Friday, the first profit in four days away from a two-week trough at $1.1265, following strong eurozone inflation data.

The euro lost 0.55% last week against the dollar, the second weekly loss in a row on concerns about the wider US-eurozone interest rate gap.

Inflationary Pressures

Earlier data showed eurozone inflation passed estimates in April, renewing pressures on ECB policymakers.

Eurozone’s consumer prices rose 2.7% in April, up from a 2.4% rise in March, and passing estimates of a 2.5% increase.

European Rates

Following the data, the odds of an ECB 0.25% interest rate cut in June fell from 60% to 50%.

Now traders await a batch of data and remarks by ECB officials this week to gather more clues.

The Australian dollar rallied in Asian trade on Monday to a five-month high against the US dollar, expanding gains for the second straight session and on track towards 65 cents.

It comes after a historic win by the governing Labor Party, which bolsters the government’s position towards growing global trade risks from Trump’s tariffs.

The Price

The AUD/USD price rose 0.55% today to $0.6481, the highest since December 2024, with a session-low at $0.6445.

The pair rose 1% on Friday, marking the best daily profit since April 11 as US-China trade tensions calmed.

Aussie rose 0.75% against the greenback last week, marking the fourth weekly profit in a row as positive sentiment grips the global financial markets.

Australian Elections

The Australian federal elections netted a majority win for the governing Labor Party,which won between 85 and 899 seats in the 150-seat Parliament, with Prime Minister Albanese becoming the first to win two consecutive terms in nearly 20 years.

The Liberal Party, led by Peter Dutton, suffered a heavy defeat with only 36 seats, with Dutton himself losing his seat.

The results expand the majority of the Labor Party and give the government a strong hand in navigating the current turbulent economic conditions. 

US stock indices rose on Friday after strong US payrolls data for April. 

US unemployment was unchanged in April at 4.2%, same as expectations. 

The US economy added 177 thousand new jobs in April, above expectations of a 138 thousand addition, while the previous reading was revised downward to show an addition of 228 thousand instead of 185 thousand.

US President Donald Trump commented on the strong data and once again asked Fed Chair Jerome Powell to cut interest rates.

Nearly two thirds of S&P 500 companies reported their results for the first quarter, with 76% beating forecasts for profits.

On trading, Dow Jones rose 1.1%, or 446 points to 41204 points as of 16:47 GMT, while S&P 500 added 1.3%, or 73 points to 5677 points, as NASDAQ climbed 1.4% to 17,965 points.