Gold prices declined in European markets on Wednesday, giving up a four-week high recorded earlier in Asian trading due to the activity of correction and profit-taking operations, coinciding with pressure from the recovery of U.S. dollar levels in the foreign exchange market.

The levels of the American currency recovered while awaiting new developments regarding the talks between the United States and Iran, as intensive diplomatic efforts continue to push for a new round of peace negotiations following the stumbling of the previous round hosted by Pakistan.

Price overview

• Gold prices today: Gold metal prices fell by 1.0% to ($4,792.82), from the opening level of trading at ($4,841.30), and recorded a high of ($4,871.34), the highest since March 18.

• Upon price settlement on Tuesday, gold prices achieved an increase of 2.2%, in the first gain within the last three days, amid optimism regarding the U.S.-Iranian talks.

The U.S. Dollar

The dollar index rose on Wednesday by about 0.2%, holding above a six-week low of 97.97 points, on its way toward achieving its first gain in the last eight days, reflecting a recovery in the levels of the American currency against a basket of global currencies.

As we know, the rise in the levels of the American currency makes gold bullion priced in U.S. dollars less attractive to buyers holding other currencies.

Aside from buying operations from cheap levels, U.S. dollar levels are recovering as investors refrain from risk, awaiting the emergence of more positive indicators regarding the talks between the United States and Iran.

Diplomatic efforts

Diplomatic efforts continue, sponsored by Pakistan, Turkey, and some other countries, to bring viewpoints closer between the United States and Iran and to push toward engaging in a new round of negotiations, following the stumbling of the previous round held in the Pakistani capital, Islamabad, on Friday.

Media reports confirmed that a new round of negotiations between Washington and Tehran may be held in Islamabad during the coming days, with the Swiss capital, Geneva, proposed as a potential alternative for the second round of U.S.-Iranian negotiations.

U.S. President Donald Trump stated on Tuesday that talks to end the war with Iran may resume in Pakistan within the next two days, after the collapse of the previous round of negotiations, which prompted Washington to impose a blockade on Iranian ports.

U.S. interest rates

• According to the "FedWatch" tool of the CME Group: the pricing of the probabilities of keeping U.S. interest rates unchanged at the April meeting is currently stable at 99%, and the pricing of the probabilities of raising interest rates by about 25 basis points is at 1%.

• In order to re-price those probabilities, investors are closely following the release of more economic data from the United States.

Gold performance expectations

Edward Meir, an analyst at Marex, said: Gold prices are affected in the short term by news from the Middle East, amid hopes of the two countries entering into negotiations.

Meir added: If things worsen again, we may return to the pre-ceasefire pattern, where gold prices fell, the dollar rose, and stock prices fell.

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased on Tuesday by about 2.29 metric tons, bringing the total up to 1,049.48 metric tons, rebounding from a total of 1,047.19 metric tons "which is the lowest level since March 30."

The euro declined in European markets on Wednesday against a basket of global currencies for the first time in the last eight days against the U.S. dollar, giving up a six-week high due to the activity of correction and profit-taking operations.

This comes in conjunction with the American currency holding above its low levels, awaiting new developments regarding the talks between the United States and Iran, as intensive diplomatic efforts continue to push for a new round of peace negotiations following the stumbling of the previous round hosted by Pakistan.

With the current decline in global oil prices, indications are increasing that inflationary pressures on monetary policy makers at the European Central Bank are receding, which reduces the likelihood of raising European interest rates this year.

Price overview

• Euro exchange rate today: The euro fell against the dollar by 0.2% to ($1.1779), from today's opening price of ($1.1795), and recorded a high of ($1.1802).

• The euro ended Tuesday's trading up by 0.3% against the dollar, in its seventh consecutive daily gain, within the longest streak of daily gains this year, and recorded a six-week high of $1.1811, amid the possibility of holding a new round of U.S.-Iranian negotiations.

The U.S. Dollar

The dollar index rose on Wednesday by about 0.2%, holding above a six-week low of 97.97 points, on its way toward achieving its first gain in the last eight days, reflecting a recovery in the levels of the American currency against a basket of global currencies.

Aside from buying operations from cheap levels, U.S. dollar levels are recovering as investors refrain from risk, awaiting the emergence of more positive indicators regarding the talks between the United States and Iran.

Diplomatic efforts

Diplomatic efforts continue, sponsored by Pakistan, Turkey, and some other countries, to bring viewpoints closer between the United States and Iran and to push toward engaging in a new round of negotiations, following the stumbling of the previous round held in the Pakistani capital, Islamabad, on Friday.

Media reports confirmed that a new round of negotiations between Washington and Tehran may be held in Islamabad during the coming days, with the Swiss capital, Geneva, proposed as a potential alternative for the second round of U.S.-Iranian negotiations.

Global oil prices

Global oil prices fell on Wednesday by about 1%, continuing their losses for the second consecutive day, with signs appearing that Washington and Tehran continue to revive peace talks, despite the United States beginning a blockade of the Strait of Hormuz.

European interest rates

• Lagarde, President of the European Central Bank, said: The bank is ready to raise interest rates even if the expected rise in inflation is short-term.

• With the decline in global oil prices, the money market pricing of the probabilities of the European Central Bank raising European interest rates by about 25 basis points in April fell from 35% to 15%.

• Sources reported to Reuters that the European Central Bank is likely to begin discussing raising interest rates during the meeting of this month.

• In order to re-price the above probabilities, investors await the release of more economic data in the eurozone regarding the levels of inflation, unemployment, and wages.

The Japanese yen declined in Asian trading on Wednesday against a basket of major and minor currencies, resuming its losses that temporarily paused yesterday against the U.S. dollar, as the American currency holds above its low levels, awaiting new developments regarding the talks between the United States and Iran, as intensive diplomatic efforts continue to push for a new round of peace negotiations following the stumbling of the previous round hosted by Pakistan.

With the current decline in global oil prices, indications are increasing that inflationary pressures on monetary policy makers at the Bank of Japan are receding, which reduces the likelihood of raising Japanese interest rates later this month.

Price overview

• Japanese yen exchange rate today: The dollar rose against the yen by 0.2% to (159.06¥), from today's opening price of (158.77¥), and recorded a low of (158.72¥).

• The yen ended Tuesday's trading up by 0.4% against the dollar, in its first gain within the last four days, after a breakthrough in U.S.-Iranian talks.

The U.S. Dollar

The dollar index rose on Wednesday by about 0.2%, holding above a six-week low of 97.97 points, on its way toward achieving its first gain in the last eight days, reflecting a recovery in the levels of the American currency against a basket of global currencies.

Aside from buying operations from cheap levels, U.S. dollar levels are recovering as investors refrain from risk, awaiting the emergence of more positive indicators regarding the talks between the United States and Iran.

Diplomatic efforts

Diplomatic efforts continue, sponsored by Pakistan, Turkey, and some other countries, to bring viewpoints closer between the United States and Iran and to push toward engaging in a new round of negotiations, following the stumbling of the previous round held in the Pakistani capital, Islamabad, on Friday.

Media reports confirmed that a new round of negotiations between Washington and Tehran may be held in Islamabad during the coming days, with the Swiss capital, Geneva, proposed as a potential alternative for the second round of U.S.-Iranian negotiations.

Global oil prices

Global oil prices fell on Wednesday by about 1%, continuing their losses for the second consecutive day, with signs appearing that Washington and Tehran continue to revive peace talks, despite the United States beginning a blockade of the Strait of Hormuz.

Japanese interest rates

• The pricing of the probabilities of the Bank of Japan raising interest rates by a quarter of a percentage point in the April meeting is currently stable around 10%.

• In order to re-price those probabilities, investors await the release of more data on the levels of inflation, unemployment, and wages in Japan.

The price of Ethereum rose by approximately 8%, maintaining its recent gains amid attempts by buyers to break the $2,400 level, in an upward movement that came in parallel with the positive momentum in the Bitcoin market.

Ethereum's price managed to remain stable above the $2,180 support level and began a new upward wave, gaining momentum that pushed it past the $2,200 and $2,250 levels. During trading, the price broke through a descending trend line that was forming resistance near the $2,200 level on the hourly ETH/USD chart.

Buyers pushed the price to rise above the $2,350 level, recording a peak at $2,395, before entering a consolidation phase for gains above the 23.6% Fibonacci retracement level of the upward movement extending from the low of $2,179 to the peak of $2,395.

Ethereum is currently trading above the $2,350 level as well as above the 100-hour simple moving average. If buying momentum continues above the $2,320 level, the price may attempt to record a new upward wave.

Immediate resistance appears near the $2,380 level, while the $2,400 area is the first major resistance. If the price succeeds in breaking it, it may head toward the $2,440 level. In the event of a clear break above this level, it may open the way toward $2,500, with the possibility of gains later extending to $2,550 and perhaps $2,620 in the near term.

On the other hand, if Ethereum fails to clear the $2,400 resistance, it may begin a downward correction. The first important support appears at the $2,345 level, followed by stronger support at the $2,320 area.

In the event of a downward break of the $2,320 level, the decline may extend toward $2,260, which corresponds to the 61.8% Fibonacci retracement level of the upward wave from $2,179 to $2,395. Further decline could lead to testing the $2,230 area, while the most important support remains at the $2,180 level.

Technical indicators point out that the Moving Average Convergence Divergence (MACD) on the hourly timeframe continues to gain momentum in the positive zone, while the Relative Strength Index (RSI) appears above the 50 level, reflecting the continuation of the upward bias in the short term.