Gold prices fell in the European market on Wednesday, deepening their losses for the second consecutive day. The metal dropped below the $3,300 per ounce level, hitting its lowest point in a week, under pressure from rising U.S. dollar levels in the foreign exchange market.

Markets are awaiting the release of the latest Federal Reserve meeting minutes later today, which are expected to offer strong clues regarding the likelihood of U.S. interest rate cuts in the second half of the year.

The Price

Gold prices declined by 0.5% to $3,284.51, marking the lowest level since June 30, down from the session's opening at $3,301.83. The intraday high was recorded at $3,308.02.

On Tuesday, gold settled down by 1.05% as safe-haven demand for the metal weakened.

U.S. Dollar

The dollar index rose by more than 0.2% on Wednesday, resuming gains that had paused briefly in the previous session. The index is nearing a two-week high of 97.84, reflecting broad strength in the U.S. currency against a basket of major and minor currencies.

President Donald Trump stated on social media that there would be announcements on Wednesday concerning "at least seven trade-related countries," without providing further details.

He also threatened to impose a 50% tariff on imported copper and said he would soon enact long-standing tariff threats on semiconductors and pharmaceuticals.

According to European sources cited by Reuters, the European Union is unlikely to receive a tariff letter and may be granted exemptions from the standard U.S. tariff rate of 10%.

U.S. Interest Rates

According to the CME FedWatch tool, the probability of a 25 basis point rate cut at the July meeting is currently priced at 5%, while the probability of maintaining current rates stands at 95%.

For the September meeting, markets are pricing in a 62% chance of a 25 basis point rate cut and a 38% chance of no change.

To reassess these probabilities, investors are closely monitoring the release of the Fed’s latest meeting minutes due later today.

Gold Outlook

Market strategist Ilya Spivak commented that gold has held up remarkably well this month despite rising yields and a strong U.S. dollar. Its ability to withstand pressure points to underlying strength and a bullish bias.

Spivak added that while this is a data-light week, the market’s response to the June FOMC meeting minutes may play a key role in shaping sentiment in the ongoing policy debate between the Fed and the markets.

SPDR Gold Trust Holdings

Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by approximately 1.15 metric tons on Tuesday. The total now stands at 946.51 metric tons, marking the lowest level since June 17.

The euro declined in the European market on Wednesday against a basket of global currencies, resuming losses that had temporarily paused on Tuesday against the U.S. dollar. The currency edged closer to its lowest level in two weeks, following a renewed wave of trade-related statements from President Donald Trump, who recently imposed 25% tariffs on Japan and other trade partners.

According to European sources familiar with the matter, cited by Reuters, the European Union is unlikely to receive a tariff letter from the U.S. and may be granted exemptions from the standard 10% U.S. tariff rate.

Recent inflation data from Europe have increased uncertainty over the possibility of an interest rate cut by the European Central Bank in July, with markets awaiting more key economic data from the eurozone.

Price Action

The euro fell by 0.2% against the dollar to $1.1701, down from the day’s opening price of $1.1724. The currency recorded an intraday high of $1.1729.

On Tuesday, the euro closed up by 0.15% versus the dollar, having earlier touched a two-week low of $1.1682.

U.S. Dollar

The U.S. dollar index rose by more than 0.2% on Wednesday, resuming gains after a brief pause in the previous session. The index is now nearing a two-week high of 97.84, reflecting broad-based strength in the U.S. dollar against both major and minor currencies.

President Donald Trump announced on social media that there would be trade-related announcements on Wednesday involving "at least seven countries," without providing further details.

He also threatened to impose a 50% tariff on imported copper and reiterated long-standing threats of tariffs on semiconductors and pharmaceuticals.

Tariff Exemptions

European officials told Reuters that the EU is unlikely to be included in the new tariff directives and may receive exemptions from the standard 10% base U.S. tariff rate.

European Interest Rates

Headline inflation in Europe rose by 2.0% year-on-year in June, in line with market expectations, and up from a 1.9% increase in May.

According to Reuters, a clear majority at the European Central Bank's latest meeting favored keeping interest rates unchanged in July, with some members calling for a longer pause.

Money markets currently price in a 30% chance of a 25 basis point rate cut by the ECB in July.

To reassess these probabilities, investors are closely watching upcoming economic data from the eurozone, as well as comments from ECB policymakers.

The New Zealand dollar declined in Asian trading on Wednesday against a basket of major and minor currencies, hitting a two-week low against its U.S. counterpart. The drop followed a widely expected decision by the Reserve Bank of New Zealand to leave interest rates unchanged at their lowest level in three years.

The RBNZ stated that it expects to ease monetary policy if inflationary pressures continue to decline as projected over the medium term.

The Price

The New Zealand dollar fell around 0.3% against the U.S. dollar to 0.5979, its lowest level since June 24, down from the day’s opening price of 0.5995. It recorded an intraday high of 0.6015.

On Tuesday, the NZD had risen by approximately 0.1% versus the U.S. dollar, marking its first gain in five days as it attempted to recover from recent lows.

Reserve Bank of New Zealand

As anticipated, the RBNZ held its benchmark interest rate steady at 3.25% on Wednesday, its lowest level since April 2022, following six consecutive rate cuts, the most recent of which occurred at the prior meeting.

The central bank has slashed rates by a total of 225 basis points since August 2024. However, with inflation at 2.5% and concerns that trade tensions could heighten price pressures, the bank adopted a more cautious tone.

The RBNZ noted that if medium-term inflationary pressures continue to recede as expected, the committee anticipates further cuts to the Official Cash Rate (OCR).

The central bank added that the economic outlook remains highly uncertain. Additional data on the pace of New Zealand’s recovery, inflation persistence, and the impact of tariffs will shape the future path of interest rates.

The statement also highlighted that while higher export prices and lower interest rates are supporting New Zealand’s recovery, growing global policy uncertainty and tariff measures are likely to dampen global economic growth.

The RBNZ explained that this is expected to slow the pace of New Zealand’s recovery, which would ease inflationary pressures.

Markets now expect that the continued weakness in the economy will give the RBNZ enough room to cut interest rates at least once more this year.

New Zealand Rate Outlook

Following the RBNZ meeting, the probability of a 25-basis-point rate cut at the August 20 meeting rose above 60%.

Futures pricing for New Zealand interest rates suggests an OCR of 3.0% by year-end.

To reassess these expectations, investors will closely monitor upcoming key economic data from New Zealand, particularly reports on inflation, unemployment, and GDP growth.

The Reserve Bank of New Zealand (RBNZ) announced its interest rate decision on Wednesday morning at the conclusion of its July 9 meeting, keeping the official cash rate unchanged at 3.25% — the lowest level since April 2022 — in line with market expectations.

The RBNZ stated that it expects to ease monetary policy if medium-term inflationary pressures continue to decline as anticipated.