Gold prices rose in European trading on Wednesday, resuming gains that were temporarily paused yesterday, and approached a four-week high, supported by the decline of the US dollar in the foreign exchange market.

With expectations for a Federal Reserve rate cut in March continuing to fade, markets are awaiting further evidence regarding the direction of US monetary policy throughout this year.

Price Overview

Gold prices today: gold rose by 1.3% to $5,210.74, up from the session opening level of $5,142.85, while recording a low of $5,121.57.

At Tuesday’s settlement, gold prices fell by around 1.65%, marking the first loss in five sessions, as a result of corrective moves and profit-taking after earlier reaching a four-week high of $5,249.88 per ounce.

US Dollar

The US Dollar Index declined by more than 0.2% on Wednesday, resuming losses that had paused over the previous two sessions, reflecting renewed weakness in the US currency against a basket of major and secondary currencies.

As is widely known, a weaker US dollar makes dollar-denominated gold bullion more attractive to buyers holding other currencies.

President Donald Trump’s State of the Union address to Congress added to market uncertainty, as it failed to provide sufficient reassurance about the stability of trade policy following the Supreme Court ruling that voided previous tariffs, prompting investors to sell dollar-denominated assets.

US Interest Rates

Federal Reserve Governor Christopher Waller said he is open to keeping interest rates unchanged at the March meeting if February labor market data shows that employment conditions have stabilized after the weak performance seen in 2025.

According to the CME FedWatch tool, pricing for keeping US interest rates unchanged at the March meeting remains steady at 95%, while the probability of a 25 basis point rate cut stands at 5%.

To reassess these expectations, investors are closely watching upcoming US economic data releases, in addition to remarks from Federal Reserve officials.

Gold Outlook

Jim Wyckoff, senior analyst at Kitco Metals, said gold prices are moving higher again after a temporary correction, adding that the weaker US dollar is also supporting the rise in prices.

SPDR Gold Trust

Gold holdings in the SPDR Gold Trust — the world’s largest gold-backed exchange-traded fund — increased by 7.72 metric tons on Tuesday, marking the second consecutive daily rise. Total holdings climbed to 1,094.19 metric tons, the highest level since April 29, 2022.

The euro rose in European trading on Wednesday against a basket of global currencies, moving higher versus the US dollar as renewed pressure weighed on US assets, particularly the dollar, following President Donald Trump’s State of the Union address to Congress, which added to market uncertainty.

As inflationary pressures ease on policymakers at the European Central Bank, hopes have re-emerged for at least one European interest rate cut this year, while investors await further evidence regarding the timing of such a move.

Price Overview

Euro exchange rate today: the euro rose against the dollar by around 0.3% to $1.1805, up from the opening level of $1.1772, while recording a session low of $1.1771.

The euro ended Tuesday’s trading down by 0.1% against the dollar, resuming losses after a two-day pause during a recovery from the four-week low at $1.1742.

US dollar

The dollar index fell by more than 0.2% on Wednesday, resuming losses after a two-session pause, reflecting weaker performance of the US currency against a basket of major and secondary currencies.

President Donald Trump’s State of the Union speech in Congress increased market uncertainty, as it did not provide sufficient reassurance about trade policy stability following the Supreme Court ruling that invalidated previous tariffs, prompting investors to sell dollar-denominated assets.

Trade tensions

The European Parliament decided to postpone voting on the trade agreement with the United States in response to what it described as the “tariff chaos” created by President Donald Trump’s recent decisions.

Some European lawmakers argue that the current agreement favors the United States, as it grants American products zero-tariff access to European markets, while Europe would face tariffs of up to 15%, increasing pressure to suspend ratification.

European interest rates

Recent data released in Europe showed easing inflationary pressures on policymakers at the European Central Bank.

Following this data, money markets raised pricing for a 25 basis point European interest rate cut in March from 10% to 25%.

Traders also adjusted expectations from holding interest rates steady throughout the year to anticipating at least one 25 basis point cut.

Investors are now waiting for further economic data from the euro area on inflation, unemployment, and wages to reassess these expectations.

The Australian dollar rose in Asian trading on Wednesday against a basket of global currencies, moving into positive territory for a second consecutive day against its US counterpart and approaching its highest level in several weeks, following the release of stronger-than-expected inflation data in Australia.

The data indicates that persistent inflationary pressures remain in place for policymakers at the Reserve Bank of Australia, reinforcing expectations of an Australian interest rate hike in March.

Price Overview

The Australian dollar exchange rate today: the Australian dollar rose against the US dollar by 0.7% to 0.7110, up from the opening level of 0.7061, while recording a session low of 0.7057.

The Australian dollar ended Tuesday’s trading up by around 0.1% against the US dollar, marking a third daily gain within the past three sessions, supported by the recovery in global equity markets.

Inflation in Australia

Data released on Wednesday by the Australian Bureau of Statistics showed that the headline consumer price index rose by 3.8% year-on-year in January, above market expectations of a 3.7% increase, matching the 3.8% reading recorded in December.

Australian inflation came in above expectations in January.

These figures indicate that inflation remains above the Reserve Bank of Australia’s medium-term target range of 2% to 3%, strengthening the case for continued normalization of monetary policy and further interest rate increases.

Reserve Bank of Australia Governor Michele Bullock said earlier that inflation remains too high and cannot be allowed to get out of control, adding that there are concerns about the persistence of elevated inflation levels.

Australian interest rates

Following the above data, market pricing for a 25 basis point interest rate hike by the Reserve Bank of Australia in March rose from 50% to 60%.

Pricing for a 25 basis point rate hike in May also increased from 80% to 95%.

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

China has achieved a historic milestone in the energy sector, as its electricity generation capacity from clean energy sources has exceeded fossil fuel capacity for the first time ever, driven by a decade-long boom in solar and wind power investment.

According to data tracked by Global Energy Monitor, 52% of China’s operational power generation capacity came from non-fossil sources as of February 2026, while 48% of installed capacity still relies on fossil fuels.

For years, China — the world’s largest carbon emitter — has led global clean energy investment, installing more solar and wind capacity than the rest of the world combined.

China’s clean energy capacity, including nuclear and hydropower, is expanding at a record pace as the world’s second-largest economy seeks to rely more on domestic energy sources to meet rising electricity demand, supported by a massive supply chain for solar panels and batteries.

Despite the green transition… coal remains dominant

However, Beijing continues to rely on coal as well, with coal power capacity additions in 2025 reaching their highest level in a decade.

China operates the world’s largest coal-fired power fleet and accounts for 71% of global coal capacity currently under development, according to the organization’s data.

China is leading growth in both renewable energy and coal at the same time to meet increasing electricity demand, meaning the clean energy boom has not made the coal sector irrelevant.

This strategy is partly driven by energy security concerns, as China continues building coal plants to avoid power shortages and factory shutdowns during peak demand periods or dry seasons that affect hydropower generation.

Data shows China has up to 674 gigawatts of non-fossil power capacity under construction, compared with 237 gigawatts of fossil fuel capacity under construction.

Of the total non-fossil capacity under construction, solar power leads all other energy sources, with utility-scale solar projects reaching 234 gigawatts — a capacity larger than that of the rest of the world combined.

Coal remains a major pillar of China’s energy mix

Despite clean energy dominating new expansion, coal remains a key source of electricity generation to ensure grid stability and prevent power outages during periods of high demand or hydropower shortfalls caused by drought.

As of January 2026, China had 1,243 gigawatts of operational coal-fired power capacity, with another 501 gigawatts under development, although not all projects are expected to be completed.

Over the past decade, China added 362 gigawatts of operating coal capacity.

China’s coal plant construction cycle reached peak levels last year, with 78 gigawatts of coal capacity coming online in 2025 — the highest annual figure in a decade — even as coal power generation declined, since clean energy covered all net growth in electricity demand.

New and reactivated coal project proposals also rose to a record 161 gigawatts, representing 13% of current operational capacity.

Analysts warned that proceeding with these projects could lock China into additional years of coal expansion beyond both energy demand growth and climate requirements.

China leads global energy transition investment

China remains the largest market for energy transition investment, with spending reaching about $800 billion out of a global total of $2.3 trillion in 2025, according to a BloombergNEF report.

The report added that China continues to represent the majority of global energy supply chain investment, a trend expected to continue for at least the next three years.

Ultimately, China is not abandoning one energy source in favor of another. Instead, it is expanding domestic industries to accelerate renewable energy while continuing to rely on coal as a foundational source to ensure electricity grid stability.