Gold prices rose in European trading on Thursday, remaining in positive territory for a second consecutive day as the metal continued recovering from its lowest level in nearly two months, supported by a weaker US dollar against a basket of currencies amid growing optimism over a possible peace agreement between the United States and Iran.

Expectations for at least one US interest rate hike this year have also increased, especially after the release of the minutes from the latest Federal Reserve policy meeting, which showed policymakers remain open to raising rates further.

Price overview

• Gold prices today: Gold rose 0.65% to $4,570.93 per ounce, from an opening level of $4,542.23, after touching an intraday low of $4,512.06.

• At Wednesday’s settlement, gold gained 1.4%, after earlier falling to a two-month low of $4,453.60 per ounce.

The US dollar

The US Dollar Index fell 0.1% on Thursday, extending losses for a second consecutive session and moving further away from its highest levels in a month and a half, reflecting continued weakness in the US currency against a basket of global currencies.

Beyond profit-taking activity, the dollar weakened as optimism increased over Washington nearing an agreement with Tehran to end the war in the Middle East.

Developments in the US-Iran negotiations

• Trump: The United States is in the final stages of negotiations with Iran.

• Trump said he is prepared to wait a few days for the “right answer” regarding a peace agreement with Iran.

• Iran’s Foreign Ministry officially announced that it is currently reviewing the latest response and proposals received from Washington through the Pakistani mediator.

• Sources: A new round of US-Iran peace negotiations will be held in Islamabad after the Hajj season.

• Pakistan’s army chief may visit Iran today, Thursday, to announce the final draft of the agreement.

US interest rates

• Minutes from the Federal Reserve’s April meeting showed that most policymakers believe “some additional tightening in monetary policy may become appropriate” if inflation remains above the central bank’s 2% target.

• Kevin Warsh will be sworn in as Chairman of the Federal Reserve on Friday.

• According to CME’s FedWatch Tool, markets are currently pricing in a 40% probability that the Federal Reserve will raise interest rates in December, compared to just above 16% at the beginning of May.

• Markets continue to price a 99% probability that interest rates will remain unchanged at the June meeting, while the probability of a 25-basis-point rate cut stands at only 1%.

• To reassess these expectations, investors are closely monitoring upcoming US economic data as well as comments from Federal Reserve officials.

Gold outlook

Kelvin Wong, Senior Market Analyst for Asia-Pacific at OANDA, said sentiment improved “after Trump’s remarks indicating that the United States and Iran are approaching the final stages of a peace agreement.”

Wong added: “The broader trend in the US 10-year Treasury yield has remained moderately bullish since early March. Therefore, gold bulls may not be overly enthusiastic about pushing prices significantly higher at this stage.”

SPDR Gold Trust

Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained essentially unchanged on Wednesday, with total holdings steady at 1,036.85 metric tons, the lowest level in a week.

The euro rose in European trading on Thursday against a basket of global currencies, extending its recovery for a second straight session from a six-week low against the US dollar, supported by continued bargain buying and easing demand for the US currency as a safe haven amid optimism over a potential peace agreement between the United States and Iran.

Investors are now awaiting a series of economic releases later today covering the main sectors of the European economy for May, as markets continue to reprice rising expectations that the European Central Bank could raise interest rates at its June meeting.

Price Overview

• Euro exchange rate today: The euro rose by around 0.1% against the US dollar to $1.1635, from the session opening level at $1.1624, after touching an intraday low of $1.1616.

• The euro ended Wednesday’s session up around 0.2% against the dollar after earlier falling to a six-week low of $1.1583.

• In addition to bargain buying at lower levels, the euro gained alongside improving risk appetite in global markets following positive remarks regarding US-Iran negotiations.

US dollar

The US Dollar Index fell by around 0.1% on Thursday, extending losses for a second consecutive session and moving further away from one-and-a-half-month highs, reflecting continued weakness in the US currency against a basket of major and minor currencies.

Beyond profit-taking activity, the dollar weakened as hopes increased that Washington is nearing an agreement with Tehran to end the war in the Middle East.

Iran war developments

• Trump: The United States is in the final stages of negotiations with Iran.

• Trump said he is willing to wait a few more days for the “right answer” regarding a peace agreement with Iran.

• Iran’s Foreign Ministry officially announced that it is currently reviewing the latest responses and proposals received from Washington through the Pakistani mediator.

• Sources: A new round of peace talks between the United States and Iran will be held in Islamabad after the Hajj season.

• Pakistan’s army chief may visit Iran on Thursday to announce the final wording of the agreement.

European interest rates

• Sources: The European Central Bank is highly likely to raise interest rates in June due to inflation expectations moving toward an undesirable scenario.

• Money markets are currently pricing in more than a 70% probability of a 25 basis point ECB rate hike at the June meeting.

• Investors are awaiting a series of economic reports later today on the key sectors of the European economy during May in order to reassess those expectations.

The Australian dollar weakened broadly in Asian trading on Thursday against a basket of global currencies, resuming losses after a temporary rebound against its US counterpart, and approaching a five-week low following weak Australian labor market data.

The data showed unemployment rising to its highest level in four and a half years, signaling that Australia’s labor market is beginning to feel the impact of the Iran war, a development that could encourage the Reserve Bank of Australia to remain cautious and leave interest rates unchanged in the near term.

Price Overview

• Australian dollar exchange rate today: The Australian dollar fell by around 0.7% against the US dollar to 0.7100, from the day’s opening level at 0.7149, after reaching an intraday high of 0.7157.

• The Australian dollar ended Wednesday’s session up around 0.65% against the US dollar, marking its second gain in three sessions, as part of a recovery attempt from a five-week low of 70.80 US cents.

• Aside from bargain buying at lower levels, the Australian dollar also found support from strong gains in US equities on Wall Street.

Australian labor market

Figures released Thursday by the Australian Bureau of Statistics showed net employment falling by 18,600 jobs in April, marking Australia’s first monthly job loss since November 2025, and coming in far worse than market expectations for an increase of 16,700 jobs. In March, employment had risen by 23,300 jobs after an upward revision from a previously reported gain of 17,900.

Government data also showed the unemployment rate rising to 4.5%, the highest level since November 2021, above market expectations of 4.3%, compared with 4.3% in March.

The data indicates easing tightness in Australia’s labor market, reducing pressure on policymakers at the Reserve Bank of Australia and reinforcing expectations that Australian interest rates will remain unchanged for as long as possible this year.

Australian interest rates

• Following the release of the data, market pricing for a 25 basis point rate hike by the Reserve Bank of Australia in June dropped sharply from 25% to 5%.

• Investors are now awaiting additional data on inflation, unemployment, and wage growth in Australia to reassess those expectations.

Opinions and analysis

Krishna Bhimavarapu, economist at State Street Global Advisors, said: “Today’s sharp rise in the unemployment rate suggests labor market conditions may be shifting faster than expected, reinforcing the Reserve Bank of Australia’s inclination to keep monetary policy unchanged in June.”

Harry Murphy Cruise, economist at Oxford Economics Australia, said the figures likely reflect economic conditions before the war, noting that companies’ hiring decisions usually lag behind broader economic shocks.

US crude oil prices fell below $100 per barrel on Wednesday after President Donald Trump said negotiations with Iran had reached their final stages.

US West Texas Intermediate futures dropped more than 5% to settle at $98.26 per barrel, while global benchmark Brent crude futures also lost more than 5% to close at $105.02 per barrel.

Trump said earlier this week that he halted the resumption of military strikes against Iran to allow more time for diplomacy, following requests from Gulf Arab allies. He later told reporters on Wednesday, according to media reports, that the US administration was in the “final stages” of negotiations with Iran.

The US president has repeatedly expressed optimism about the possibility of reaching a deal with Iran and ending the war quickly, although tensions have repeatedly resurfaced between Washington and Tehran afterward.

Iran and the United States have remained locked in a standoff for weeks, with Tehran imposing restrictions on shipping through the Arabian Gulf’s Strait of Hormuz, while Washington has continued measures targeting Iranian ports. The Strait of Hormuz remains one of the world’s most important routes for global oil and gas trade.

Citibank warned on Tuesday that markets are underestimating the risk of prolonged disruptions to oil supplies through the Arabian Gulf’s Strait of Hormuz, forecasting that Brent crude could reach $120 per barrel in the near term.

Bank analysts said they increasingly believe that “the Iranian regime is likely to disrupt oil flows through the Arabian Gulf’s Strait of Hormuz for some time.”

Consultancy firm Wood Mackenzie also projected that oil prices could surge to $200 per barrel under an extreme scenario in which the strait remains largely closed through the end of the year.

However, the firm added that prices would fall sharply if a rapid peace agreement between the United States and Iran reopens the Arabian Gulf’s Strait of Hormuz by June, potentially pushing Brent crude down to around $80 per barrel by the end of 2026.