Gold prices rose in the European market on Wednesday, moving up from a one-week low supported by the current slowdown in the American currency. This comes after U.S. President Donald Trump announced an indefinite extension of the ceasefire with Iran.

Statements by Federal Reserve nominee Kevin Warsh during a Senate hearing were interpreted as leaning toward a hawkish stance; however, markets are still waiting for more evidence regarding the path of U.S. interest rates.

Price Overview

- Gold Prices Today: Gold metal prices rose by 1.1% to ($4,772.41), from an opening level of ($4,719.37), and recorded a low of ($4,715.69).

- Upon price settlement on Tuesday, gold prices lost about 2.2% in their second consecutive daily loss, reaching a one-week low of 4,668.74 dollars per ounce due to Iran's refusal to participate in the peace negotiations scheduled in Pakistan.

The U.S. Dollar

The dollar index fell on Wednesday by 0.2%, retreating from a high of 98.57 points, reflecting a slowdown in the American currency's levels against a basket of major and minor currencies.

Beyond correction and profit-taking, U.S. dollar levels are declining due to a slowdown in safe-haven buying as markets welcomed Trump's decision to extend the ceasefire with Iran.

Iranian War Updates

- U.S. President Donald Trump announced the extension of the ceasefire with Iran indefinitely.

- Pakistan, the mediator in the peace talks, requested the ceasefire extension.

- Trump: "We will extend the ceasefire until Iran presents its proposal and discussions conclude one way or another."

- Iranian state television announced that Tehran will not commit to the truce extension announced by Trump.

- Advisor to the Speaker of the Iranian Parliament: "Trump's extension of the ceasefire is an attempt to gain time for a surprise strike."

U.S. Interest Rates

- Kevin Warsh, the nominee for a senior position on the Federal Reserve Board, stated on Tuesday that he has made no promises to Trump regarding interest rate cuts.

- According to the CME Group's FedWatch tool: the probability of keeping U.S. interest rates unchanged at the April meeting is currently stable at 99%, while the probability of a 25-basis-point hike stands at 1%.

- To re-price these 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: "With this ceasefire extension, markets see a decrease in the intensity of the crisis in the Middle East."

Meir added: "If the ceasefire ends and hostilities resume, we will see an increase in the value of the dollar and a rise in oil prices and interest rates, which will negatively affect gold prices."

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained virtually unchanged on Tuesday, with the total staying at 1,059.76 metric tons.

The British pound rose in the European market on Wednesday against a basket of global currencies, beginning a recovery from a one-week low against the U.S. dollar. The pound capitalized on the slowdown of the American currency following President Trump's announcement to extend the ceasefire with Iran indefinitely.

This move into positive territory comes ahead of the release of key UK inflation data for March, which will provide crucial evidence regarding the probability of the Bank of England (BoE) raising British interest rates in the near term.

Price Overview

- British Pound Exchange Rate Today: The pound rose against the dollar by 0.1% to ($1.3520), from an opening price of ($1.3506), and recorded a low of ($1.3498).

- On Tuesday, the pound lost 0.2% against the dollar and recorded a one-week low of 1.3475 dollars due to Iran's refusal to participate in peace negotiations with the United States.

The U.S. Dollar

The dollar index fell on Wednesday by 0.1%, retreating from its high of 98.57 points, reflecting a slowdown in the American currency's levels against a basket of global currencies.

Beyond correction and profit-taking, U.S. dollar levels are declining due to a slowdown in safe-haven buying as markets welcomed Trump's decision to extend the ceasefire with Iran.

Regarding monetary policy, statements by Federal Reserve nominee Kevin Warsh during a Senate hearing were interpreted as leaning toward a hawkish stance, while strong retail sales data provided an optimistic outlook for the U.S. economy's performance during the first quarter of this year.

Iranian War Updates

- U.S. President Donald Trump announced the extension of the ceasefire with Iran indefinitely.

- Pakistan, the mediator in the peace talks, requested the ceasefire extension.

- Trump: "We will extend the ceasefire until Iran presents its proposal and discussions conclude one way or another."

- Iranian state television announced that Tehran will not commit to the truce extension announced by Trump.

- Advisor to the Speaker of the Iranian Parliament: "Trump's extension of the ceasefire is an attempt to gain time for a surprise strike."

British Interest Rates

- The Bank of England warned after its last meeting that inflation will rise in the near term due to higher energy prices caused by the Iranian war.

- Market pricing for the probability of the Bank of England raising British interest rates at its April meeting is stable at around 25%.

UK Inflation Data

To re-price the existing probabilities regarding British interest rates, investors are waiting later today for the release of key inflation data in the United Kingdom for March, which is expected to significantly influence the Bank of England's monetary policy path.

The headline Consumer Price Index (CPI), due at 06:00 GMT, is expected to rise by 3.3% annually in March, up from 3.0% in February, while the Core CPI is expected to remain stable at an annual increase of 3.2%.

British Pound Performance Expectations

If the British inflation data comes in higher than market expectations, the probability of a British interest rate hike in April will rise, which will strengthen the current gains in the levels of the British pound.

The Japanese yen rose in the Asian market on Wednesday against a basket of major and minor currencies as part of recovery attempts from a one-week low against the U.S. dollar. The yen benefited from a slowdown in the American currency following President Trump's announcement to extend the ceasefire with Iran indefinitely.

The probability of the Bank of Japan (BoJ) raising interest rates during its April meeting remains weak, 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 fell against the yen by 0.1% to (159.17¥), from today’s opening price of (159.32¥), and recorded a high of (159.42¥).

- The yen ended Tuesday's trading down by 0.3% against the dollar, its second consecutive daily loss, reaching a one-week low of 159.64 yen after Iran refused to participate in the second round of peace negotiations in Pakistan.

The U.S. Dollar

The dollar index fell on Wednesday by 0.1%, retreating from a high of 98.57 points, reflecting a slowdown in the levels of the American currency against a basket of global currencies.

Beyond correction and profit-taking, the U.S. dollar is declining due to a slowdown in safe-haven buying as markets welcomed Trump's decision to extend the ceasefire with Iran.

Regarding monetary policy, the statements of Federal Reserve nominee Kevin Warsh during a Senate hearing were interpreted as leaning toward a hawkish stance, while strong retail sales data provided an optimistic outlook for the U.S. economy's performance during the first quarter of this year.

Iranian War Updates

- U.S. President Donald Trump announced the extension of the ceasefire with Iran indefinitely.

- Pakistan, the mediator in the peace talks, requested the ceasefire extension.

- Trump: "We will extend the ceasefire until Iran presents its proposal and discussions conclude one way or another."

- Iranian state television announced that Tehran will not commit to the truce extension announced by Trump.

- Advisor to the Speaker of the Iranian Parliament: "Trump's extension of the ceasefire is an attempt to gain time for a surprise strike."

Japanese Interest Rates

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

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

- To re-price these probabilities, investors await further data on inflation, unemployment, and wages in Japan.

Kevin Warsh, chosen by President Donald Trump to succeed Federal Reserve Chair Jerome Powell, has presented a broad and provocative vision for change within the central bank. His plan includes a comprehensive restructuring of its operations, policies, and communication style with the markets.

His most prominent ideas—as expressed in previous statements and speeches—include what he describes as a "regime change" in monetary policy, cutting interest rates, shrinking the Fed's balance sheet, and redefining the central bank's role to be more focused and less expansive in its mandates.

"Regime Change" in monetary policy

In a July 2025 interview with CNBC, Warsh stated that "the way monetary policy is managed has been broken for a long time," adding that the current central bank is radically different from the one he joined in 2006.

He emphasized: "We need a regime change at the Fed... We do not need to continue the policies that led to the biggest macroeconomic error in 45 years, which caused division in the country and high inflation."

Cutting rates and shrinking the balance sheet

In other remarks to Fox Business, he stated simply: "Interest rates should be lower."

He also wrote in a Wall Street Journal op-ed that reducing the central bank's massive balance sheet could allow for lower interest rates and support households and small-to-medium-sized businesses.

A different vision for inflation

During a lecture at the International Monetary Fund (IMF), Warsh criticized what he described as intellectual errors that contributed to high inflation, arguing that some economic models were unrealistic and that massive fiscal policies were a primary cause of the recent inflationary wave, rather than just external shocks like the pandemic or the war in Ukraine.

He also predicted that artificial intelligence could lead to a structural decline in prices in the coming years.

Downsizing the central bank's role

Warsh believes the Fed must significantly shrink its balance sheet, considering it "several trillion larger than it should be," and that this inflation in the balance sheet has led to market distortions.

Fed independence and a narrower focus

Despite his strong support for central bank independence, Warsh stressed that this independence must focus on one primary goal: price stability.

He said that "the more the Fed expands its talk on issues outside its scope, the greater the risks to its ability to achieve economic stability."

Reducing "noise" within the Fed

He criticized the frequency of statements issued by central bank officials, considering them to cause "message chaos," and called for a reduction in what he described as "verbal contradictions" within the institution.

He also pointed to the need for improved coordination between the Fed and the Treasury Department regarding fiscal policies and the bond market, without compromising the independence of monetary decisions.

The image of a nominee with a broad change agenda

Warsh's statements show that he adopts a more aggressive approach to restructuring the central bank, combining rate cuts, balance sheet reduction, institutional role redefinition, and a tightened focus on fighting inflation—all part of what he himself described as a "radical reform" of how the Fed functions.

Today's hearing

Federal Reserve Chair nominee Kevin Warsh called for a “radical system change” within the U.S. central bank, including a new framework for controlling inflation and a reshaping of how the Fed communicates with the public regarding monetary policy.

During his confirmation hearing before the Senate Banking Committee, Warsh held the central bank responsible for the inflationary wave that followed the COVID-19 pandemic, which still affects American households.

Warsh said that “the fatal political errors of the past four or five years” still have lingering effects, noting that the Fed needs a “systemic change in managing monetary policy,” including a “new and different framework for inflation.”

He added that the Fed's method of communicating with markets and the public “exacerbated the problem,” hinting at the possibility of adjusting the quarterly economic forecast mechanism and the interest rate path.

Tense hearing

The session quickly turned tense as Warsh avoided giving a direct answer to a question about whether President Donald Trump lost the 2020 election—a point Democratic Senator Elizabeth Warren considered a benchmark for testing his independence.

He also stated that he would continue with his plan to sell assets exceeding $100 million in value without providing precise details about their nature or the buyer, noting that the proceeds would be invested in “traditional and simple” assets.

When asked about Trump's pressure regarding interest rate cuts, Warsh said that “presidents tend to prefer lower rates,” adding that Trump “expresses this very publicly.”