Gold prices lost nearly 2% in the European market on Monday at the start of the week's trading, retreating from a four-week high due to active correction and profit-taking, combined with pressure from the rising U.S. dollar in the foreign exchange market.

The U.S. Navy's seizure of an Iranian cargo ship led to escalating tensions between the United States and Iran over control of the Strait of Hormuz, with Tehran continuing to refuse participation in a new round of negotiations scheduled to be held in Pakistan later today.

Price Overview

- Gold Prices Today: Gold metal prices fell by approximately 2.0% to ($4,737.15), from the opening level of ($4,829.31), and recorded a high of ($4,829.31).

- Upon price settlement on Friday, gold prices achieved an increase of 0.85%, marking the first gain in three days and hitting a four-week high of $4,890.78 per ounce after Iran's announcement to open the Strait of Hormuz to global navigation.

- Last week, the precious metal "gold" achieved an increase of 1.7%, marking its fourth consecutive weekly gain, thanks to the Iranian war truce and improved market sentiment.

The U.S. Dollar

The dollar index rose on Monday by 0.15%, extending its gains for the third consecutive session and reaching its highest level in nearly a week, reflecting the continued ascent of the American currency against a basket of global currencies.

This rise comes amid renewed buying of the U.S. dollar as a safe haven, given the escalating tensions between the United States and Iran and the weakening chances of reaching a peace agreement in the Middle East.

Charu Chanana, head of investment strategy at Saxo, stated: The weekend escalation has revived the geopolitical risk premium just as markets began to price in peace gains.

Iranian War Updates

- The Iranian Navy announced the re-closing of the Strait of Hormuz as of Saturday afternoon until the U.S. blockade on Iranian ships is lifted.

- U.S. President Donald Trump stated that the U.S. Navy intercepted the Iranian-flagged cargo ship "Tosca" in the Gulf of Oman.

- Tehran considered the attack on the ship an "act of maritime piracy" and a flagrant violation of the ceasefire agreement, vowing to respond to this escalation.

- While the Pakistani capital, Islamabad, prepares to host a second round of peace negotiations later today, Iran refuses to participate in this round so far.

- Several international and regional parties are pressuring Tehran to participate in the peace negotiations before the two-week ceasefire agreement expires tomorrow, Tuesday.

Global Oil Prices

Global oil prices rose on Monday by more than 5% as part of a strong recovery from a four-week low, amid renewed fears of supply disruptions from the Arabian Gulf region, especially after the re-closing of the Strait of Hormuz to oil tankers.

Undoubtedly, the rise in global oil prices renews fears of accelerating inflation, which may prompt global central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of cutting or holding rates steady for a long period.

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

Market strategist Ilya Spivak said: Gold prices fell today after the U.S.-Iran ceasefire, which markets celebrated last week, appeared to be collapsing.

Christopher Wong, a strategist at OCBC Bank, stated: In the meantime, we still expect the gold trading trend to be influenced by general risk sentiment, and this depends heavily on the results of the ceasefire talks.

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased on Friday by about 7.71 metric tons, marking the fourth consecutive daily increase and bringing the total to 1,060.62 metric tons, which is the highest level since March 19.

The euro declined in European markets on Monday against a basket of global currencies, extending its losses for the third consecutive day against the U.S. dollar and moving further away from a two-month high amid ongoing correction and profit-taking.

This follows renewed buying of the U.S. dollar as a preferred alternative investment, amid escalating tensions between the United States and Iran over control of the Strait of Hormuz and Tehran's continued refusal to participate in a new round of negotiations scheduled for later today in Pakistan.

The current rise in global oil prices is increasing signs of growing inflationary pressures on policymakers at the European Central Bank (ECB), strengthening the probability of European interest rate hikes this year.

Price Overview

- Euro Exchange Rate Today: The euro fell against the dollar by 0.3% to ($1.1728), from today's opening price of ($1.1762), and recorded a high of ($1.1763).

- The euro ended Friday's trading down by 0.15% against the dollar, marking its second consecutive daily loss due to correction and profit-taking from a two-month high of $1.1849.

- Last week, the euro achieved a gain of 0.35% against the dollar, its third consecutive weekly gain, driven by the Iranian war truce and hopes of reaching a peace agreement.

The U.S. Dollar

The dollar index rose on Monday by 0.15%, extending its gains for the third consecutive session and reaching its highest level in nearly a week, reflecting the continued ascent of the American currency against a basket of global currencies.

This rise is fueled by renewed buying of the dollar as a top alternative investment, given the escalating tensions between the U.S. and Iran and the diminishing chances of a Middle East peace agreement.

Charu Chanana, head of investment strategy at Saxo, stated: The weekend escalation has revived the geopolitical risk premium just as markets began to price in peace gains.

Iranian War Updates

- The Iranian Navy announced the re-closing of the Strait of Hormuz as of Saturday afternoon until the U.S. blockade on Iranian ships is lifted.

- U.S. President Donald Trump stated that the U.S. Navy intercepted the Iranian-flagged cargo ship "Tosca" in the Gulf of Oman.

- Tehran labeled the ship's interception an "act of maritime piracy" and a flagrant violation of the ceasefire agreement, vowing to respond.

- While Islamabad prepares to host a second round of peace negotiations today, Iran refuses to participate so far.

- International and regional parties are pressuring Tehran to join negotiations before the two-week ceasefire expires tomorrow, Tuesday.

Global Oil Prices

Global oil prices rose on Monday by more than 5%, staging a strong recovery from a four-week low amid renewed fears of supply disruptions from the Arabian Gulf, particularly following the re-closing of the Strait of Hormuz.

Rising oil prices renew fears of accelerating inflation, which may prompt global central banks to raise interest rates in the near term—a sharp pivot from pre-war expectations of cutting or holding rates steady.

European Interest Rates

- With the rebound in global oil prices, money market pricing of the probability of the ECB raising rates by 25 basis points in April rose from 15% to 20%.

- Investors await more eurozone economic data on inflation, unemployment, and wages to re-price these probabilities.

- ECB President Christine Lagarde stated the bank is prepared to raise rates even if the expected inflation spike is short-term.

- Sources told Reuters that the ECB is likely to begin discussing rate hikes during this month's meeting.

The Japanese yen declined in the Asian market on Monday against a basket of major and minor currencies, retreating from a four-week high against the U.S. dollar due to active correction and profit-taking, alongside renewed buying of the American currency as a preferred alternative investment.

This comes amid escalating tensions between the United States and Iran over control of the Strait of Hormuz, and Tehran's continued refusal so far to participate in a new round of negotiations scheduled to be held in Pakistan later today.

Despite the current rise in global oil prices, the probability of the Bank of Japan (BoJ) raising interest rates during the April meeting remains low, especially after Governor Kazuo Ueda refrained from pledging to normalize monetary policy in the near term due to the impact of the Iranian war on economic forecasts.

Price Overview

- Japanese Yen Exchange Rate Today: The dollar rose against the yen by approximately 0.4% to (¥159.20), from Friday's closing price of (¥158.59), and recorded a low during today's trading of (¥158.74).

- The yen ended Friday's trading up by 0.35% against the dollar, marking its first gain in three days and hitting a four-week high of 157.59 yen after Iran's announcement to open the Strait of Hormuz to global navigation.

- Last week, the Japanese yen achieved a gain of approximately 0.45% against the U.S. dollar, marking its third consecutive weekly gain thanks to the Iranian war truce.

The U.S. Dollar

The dollar index rose on Monday by 0.15%, extending its gains for the third consecutive session and reaching its highest level in nearly a week, reflecting the continued ascent of the American currency against a basket of global currencies.

This rise comes amid renewed buying of the U.S. dollar as a top alternative investment, given the escalating tensions between the United States and Iran and the diminishing chances of reaching a peace agreement in the Middle East.

Iranian War Updates

- The Iranian Navy announced the re-closing of the Strait of Hormuz as of Saturday afternoon until the U.S. blockade imposed on Iranian ships is lifted.

- U.S. President Donald Trump stated that the U.S. Navy intercepted the Iranian-flagged cargo ship "Tosca" in the Gulf of Oman.

- Tehran considered the attack on the ship an "act of maritime piracy" and a flagrant violation of the ceasefire agreement, vowing to respond to this escalation.

- While the Pakistani capital, Islamabad, prepares to host a second round of peace negotiations later today, Iran refuses to participate in this round so far.

- Several international and regional parties are pressuring Tehran to participate in the peace negotiations before the two-week ceasefire agreement expires tomorrow, Tuesday.

Global Oil Prices

Global oil prices rose on Monday by more than 5% as part of a strong recovery from a four-week low, amid renewed fears of supply disruptions from the Arabian Gulf region, especially after the re-closing of the Strait of Hormuz to oil tankers.

Undoubtedly, the rise in global oil prices renews fears of accelerating inflation, which may prompt global central banks to raise interest rates in the near term—a sharp shift from pre-war expectations of cutting or holding rates steady for a long period.

Japanese Interest Rates

- BoJ Governor Kazuo Ueda refrained from pledging to raise interest rates in April, given the war's impact on economic forecasts.

- The pricing of the probability of the Bank of Japan raising interest rates by a quarter-percentage point at the April meeting is currently stable around 10%.

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

Oil prices fell sharply on Friday after Iranian Foreign Minister Abbas Araghchi announced that the Strait of Hormuz is now "fully open" during the ceasefire period between Israel and Lebanon, bolstering market hopes that major supply disruptions are receding.

Araghchi's statements on the "X" platform followed remarks by U.S. President Donald Trump late Thursday, in which he stated that the war with Iran, which began on February 28, "must be coming to an end very soon."

U.S. West Texas Intermediate (WTI) crude futures for May delivery plunged by about 12% to close at $83.85 per barrel. Global benchmark Brent crude for June delivery dropped 9% to reach $90.38 per barrel at the close.

In his post, Araghchi noted that vessels transiting the vital waterway must follow a "coordinated route" determined by Iranian maritime authorities.

Trump responded with a post on "Truth Social" thanking Iran for opening the Strait, but stated in a second post that the U.S. naval blockade on Iranian ports will remain "fully in effect" until an agreement is reached with Tehran.

Israel and Lebanon agreed on Thursday to a 10-day ceasefire that began at 5:00 PM ET. Israel's military campaign in Lebanon against the Iranian-backed group Hezbollah had previously hindered U.S. negotiations with Tehran.

In another "Truth Social" post, Trump stated that Israeli Prime Minister Benjamin Netanyahu and Lebanese President Michel Aoun would be invited to the White House for what he described as the first significant talks between the two countries since 1983.

The U.S. State Department added that the parties aim to create conditions for lasting peace, including mutual recognition of sovereignty, alongside enhancing border security and reaffirming Israel's right to defend itself.

It also noted shared concerns regarding non-state armed groups threatening Lebanese sovereignty, while Trump said he expects Lebanon to "deal with Hezbollah." These developments have bolstered hopes for a broader settlement of the Middle East conflict.

ING stated that oil prices began declining amid expectations that the U.S.-Iran ceasefire would be extended for an additional two weeks, with the potential resumption of talks to end the conflict.

However, the firm's analysts warned that the physical market is tightening with every day that oil flows through the Strait of Hormuz do not resume.

They added that even with some supplies rerouted via pipelines and limited tanker movements, the firm estimates that approximately 13 million barrels per day of supplies have been disrupted—a figure that could rise further if the U.S. blockade continues.

The analysts pointed out that "the greatest upside risk in the market is the failure of peace talks between the U.S. and Iran, a scenario that is not ruled out given the wide gap between the demands of both parties."