Gold prices fell in the European market on Monday, heading for their second loss in the last three sessions and hitting their lowest level in a week, as the metal approached a drop below \$3,300 per ounce due to strong performance by the U.S. dollar in the foreign exchange market.

U.S. President Donald Trump indicated progress in multiple trade agreements and announced an extension of tariff exemptions for several countries, easing fears of a potential recession in the U.S. economy.

The Price

Gold prices fell by 1.1% to $3,300.76 per ounce — the lowest in a week — down from the opening price of $3,337.22, after hitting an intraday high of $3,342.70.

On Friday, gold prices rose by about 0.35%, supported by thin liquidity due to the U.S. Independence Day holiday.

Last week, gold prices posted a 1.9% gain — their first weekly increase in the past three weeks — thanks to renewed buying at lower levels.

U.S. Dollar

The U.S. Dollar Index jumped about 0.5% on Monday to 97.43, its highest level in two weeks, reflecting broad gains by the greenback against a basket of major and minor currencies.

As is well-known, rising levels of the U.S. dollar tend to make dollar-priced gold bullion less attractive to buyers using other currencies.

President Donald Trump stated on Sunday that the United States is close to finalizing several trade deals in the coming days and will notify other countries of higher tariff rates by July 9, with the new tariffs taking effect on August 1.

Trump had initially announced in April a base tariff rate of 10% on most countries, with additional duties reaching up to 50%. He later postponed the effective date for all tariffs — except the 10% base — until July 9, giving most affected countries a three-week grace period.

U.S. Interest Rates

Labor market data released last week showed that the U.S. economy added 147,000 new jobs in June, exceeding expectations of 111,000. The unemployment rate fell to 4.1% from 4.2% in May, while forecasts had pointed to a rise to 4.3%.

Following the data, the CME Group’s FedWatch tool showed that the probability of a 25-basis-point rate cut in the July meeting dropped from 25% to 5%, while the likelihood of keeping rates unchanged rose from 75% to 95%.

For the September meeting, rate-cut odds fell from 95% to 70%, while expectations for no change increased from 5% to 30%.

Gold Price Outlook

Kelvin Wong, market analyst for Asia-Pacific at OANDA, said: “This short-term exemption (from the U.S.) is causing weakness in gold prices during today’s session.”

Wong added: “I expect another round of price movement around the $3,320 level, then we may reach the resistance level at $3,360 — a short-term barrier.”

SPDR Gold Trust

Holdings at SPDR Gold Trust — the world’s largest gold-backed exchange-traded fund — were unchanged on Friday for the second consecutive day, with total holdings remaining at 947.66 metric tons, the lowest level since June 18.

The euro declined in the European market on Monday against a basket of global currencies, resuming losses that had paused briefly on Friday against the U.S. dollar. The currency retreated from its four-year high due to corrective movements and profit-taking.

The U.S. dollar strengthened as the 90-day deadline set by President Donald Trump to impose reciprocal tariffs approaches this Wednesday. So far, only the United Kingdom, China, and Vietnam have agreed to any form of trade deal with the White House.

Recently released key inflation data from Europe has increased uncertainty around the likelihood of a European interest rate cut in July, as markets await further important economic figures from the eurozone.

The Price

The euro fell against the dollar by 0.15% to $1.1763, down from the opening level of $1.1778. It recorded a high of $1.1790.

The euro ended Friday’s session with a gain of over 0.1%, resuming a two-day uptrend that had paused due to profit-taking from its four-year high at $1.1830.

Over the past week, the euro gained 0.45% against the dollar, marking its second consecutive weekly advance.

U.S. Dollar

The U.S. Dollar Index rose by 0.15% on Monday, resuming gains that had briefly paused on Friday. The index is on the verge of reaching its highest level in several weeks, reflecting the dollar’s broad strength against a basket of major and minor currencies.

The dollar’s rise comes amid market anticipation of headline developments on trade, with the Trump administration’s tariff deadline looming.

Most of the United States’ trading partners are expected to face significantly higher tariffs once the 90-day grace period ends on "Liberation Day," this Wednesday. To date, only the United Kingdom, China, and Vietnam have signed any form of trade deal with the White House.

Opinions and Analysis

James Knifton, Head FX Dealer at Convera, said: “Market volatility seems inevitable once the official pause ends and new tariff levels are announced.”

He added: “At the same time, the impact might be less severe this time. Unlike earlier announcements that exceeded expectations, the current proposals are largely anticipated. Furthermore, markets seem to be pricing in a likely extension of the deadline.”

European Interest Rates

The eurozone’s Consumer Price Index rose by 2.0% year-on-year in June, in line with market expectations, after a 1.9% increase in May.

According to Reuters sources, a clear majority at the latest European Central Bank meeting expressed a preference to keep interest rates unchanged in July, with some members even advocating for a longer pause.

Money market pricing for a 25-basis-point ECB rate cut in July currently stands at around 30%.

The Japanese yen declined in the Asian market on Monday at the start of the week’s trading, slipping once again into negative territory against the U.S. dollar and nearing its lowest level in several weeks, as safe-haven demand for the currency slowed.

Meanwhile, the U.S. dollar strengthened as the end of the 90-day tariff deadline announced by President Donald Trump approaches this Wednesday. So far, only the UK, China, and Vietnam have agreed to any form of trade deals with the White House.

Expectations of a rate hike by the Bank of Japan in July have increased following strong economic data released Friday in Tokyo. Investors now await further figures on inflation, wages, and unemployment in the world’s third-largest economy.

The Price

The dollar rose against the yen by 0.35% to ¥144.84, up from the day’s opening at ¥144.37, after hitting a low of ¥144.22.

The yen had gained 0.3% against the dollar at Friday’s close — its first advance in three sessions — following strong spending data out of Japan.

On a weekly basis, the yen posted a 0.1% gain, marking its second straight weekly rise against the dollar.

U.S. Dollar

The U.S. dollar index rose 0.15% on Monday, resuming gains after a brief pause on Friday and nearing its highest level in several weeks. The move reflected broad dollar strength against a basket of major and minor currencies.

The greenback’s rise came amid growing anticipation among traders for major headlines related to trade, as the deadline set by President Trump to enforce reciprocal tariffs nears.

Most of America’s trade partners are expected to face significantly higher tariffs after the 90-day deadline expires on “Liberation Day” this Wednesday. To date, only the UK, China, and Vietnam have signed any form of trade deal with the administration.

Commentary & Analysis

James Kniveton, Senior FX Dealer at Convera, said:“Volatility seems inevitable once the pause officially ends and new tariff levels are announced.”

He added, “However, the impact this time may be less severe. Unlike previous announcements where tariffs exceeded expectations, the current proposals are largely priced in. Additionally, markets seem to be factoring in the possibility of another deadline extension.”

Japanese Interest Rates

Data released Friday in Tokyo showed household spending in Japan rose 4.7% year-over-year in May — the fastest pace since August 2022 — well above market expectations of a 1.3% rise. April spending had seen a 0.1% decline.

Following this data, the odds of the Bank of Japan raising interest rates by 25 basis points at its July meeting increased from 40% to 45%.

Investors are now awaiting further data on inflation, wages, and unemployment to reassess these expectations.

Bitcoin prices declined on Friday after surrendering recent gains, as traders braced for the upcoming implementation of U.S. President Donald Trump’s trade tariffs and markets scaled back expectations of near-term interest rate cuts — adding pressure on digital assets.

Broader cryptocurrencies also pulled back, despite U.S. lawmakers announcing the long-awaited “Crypto Week,” which will see the discussion of major regulatory bills for the sector.

Bitcoin, the world’s largest cryptocurrency, dropped 0.9% to $108,933.4 by 09:22 GMT, after climbing as high as $110,500 overnight.

Those initial gains were driven by optimism surrounding progress in U.S.–China trade talks, which helped the coin break out of a narrow trading range between $103,000 and $108,000 that had persisted for nearly a month.

Despite the retreat, Bitcoin remained on track for a second consecutive weekly gain.

However, the positive momentum faded under renewed concerns over steep U.S. tariffs and a diminished likelihood of an imminent rate cut. Adding to the pressure was Congress' approval of Trump’s sweeping tax and spending package, which is estimated to significantly expand the national debt in the coming years.

Trading volumes were expected to remain subdued Friday amid the U.S. Independence Day holiday.

Bitcoin retreats amid tariff and rate cut concerns

Bitcoin pulled back from Thursday’s highs after Trump announced plans to begin sending letters to major economies outlining the new tariff regime, starting Friday.

According to Trump, between 10 and 12 countries would receive the letters, detailing tariffs ranging from 10% to 20%, and potentially as high as 60%–70%, set to take effect on August 1.

His remarks sparked renewed concerns over the economic fallout of such measures, which could cause major disruptions to global trade.

Analysts noted that the lack of clarity surrounding U.S. trade policy has also been a key reason why the Federal Reserve has held interest rates steady. Fed Chair Jerome Powell recently warned of the inflationary risks such tariffs could trigger.

Meanwhile, Thursday’s stronger-than-expected U.S. jobs report reduced market bets on a July rate cut, and expectations for September easing were also scaled back.

It’s worth noting that digital assets typically react negatively to higher interest rates, as they reduce the liquidity available for riskier investments.

Crypto market softens despite legislative buzz in Washington

The broader crypto market saw modest declines Friday, despite the announcement of Crypto Week in the U.S. Congress — which, so far, has failed to spark an immediate rebound in prices.

Members of the House of Representatives declared that the week of July 14 will be dedicated to digital asset legislation, with three major bills expected to advance:

The GENIUS Act: A comprehensive framework for regulating stablecoins

The CLARITY Act

The Anti-CBDC Surveillance State Act

Speaker of the House Mike Johnson said in a Thursday statement: “House Republicans are taking decisive action to implement President Trump’s full digital asset and cryptocurrency agenda.”

Was Bitcoin’s move to $110,000 a breakout or a bull trap?

With Bitcoin hovering below the $110,000 threshold, traders remained divided over the coin’s next move.

Prominent trader Byzantine General posted a chart suggesting the coin may be gearing up for a breakout above $112,000, citing futures data. He noted that rising open interest alongside price movement often precedes sharp price expansions.

However, market order books began to reflect increasing sell pressure. A large block of sell orders appeared around the $110,000 level — often interpreted as profit-taking or resistance from major holders.

On the other hand, trader KillaXBT noted that Bitcoin had recently swept liquidity above resistance and below support, only to reverse quickly — a behavior typical of “fakeouts” aimed at liquidating leveraged traders before a genuine directional move.