Gold prices fell in European trade on Friday, resuming losses and trading once more above $3300 under pressure from the stronger dollar against a basket of major rivals.
Now investors await the US consumer consumption expenditure report later today, expected to provide important clues on the future path of Fed rate cuts.
Prices
Gold prices fell 0.9% today to $3287 an ounce, with a session-high at $3322.
On Thursday, gold rose 0.9%, the first profit in four days as the US appeals court stayed Trump’s reciprocal tariffs.
US Dollar
The dollar index rose 0.4% on Friday, resuming gains against a basket of major rivals.
A stronger dollar makes the greenback-denominated gold futures costlier to holders of other currencies.
It comes after a week of strong US data, which reduced concerns about a US recession this year.
US Rates
San Francisco Fed President Mary Dale said on Thursday that policymakers are still capable of delivering two rate cuts this year, but inflation must remain stable near the 2% target.
According to the Fedwatch tool, the odds of a 0.25% June interest rate cut stood at 2%, while the odds of a July rate cut stood at 25%.
Markets now expect 50 basis points of total rate cuts by the end of the year, starting October.
SPDR
Gold holdings at the SPDR Gold Trust rose 4.59 tons yesterday to a total of 930.20 tons, the highest since May 13.
The euro fell in European trade on Friday against a basket of major rivals, resuming losses against the dollar after a short hiatus yesterday, as investors shun big positions before German and Spanish inflation data for May.
Hot inflation data and bullish remarks from ECB officials led to divisions among policymakers on the rate decision in June, with investors awaiting German and Spanish inflation data this week to gather more clues.
The Price
The EUR/USD price fell 0.2% today to $1.1346, with a session-high at $1.1390.
The pair rose 0.65% on Thursday, the first loss in three days as an appeal court stayed Trump’s tariffs following a suspension by a federal court.
European Rates
Recent eurozone data showed inflation rose past estimates in April, renewing pressures on ECB policymakers.
ECB President Christine Lagarde said the euro could be a practical alternative to the dollar if governments managed to bolster the financial and security structures in the EU.
Now markets estimate a less than 50% likelihood for a 0.25% ECB rate cut in June.
Inflation Data
Investors await important inflation data from Germany and Spain later today, followed by data for the whole eurozone next week, crucial for gauging the future path of the ECB interest rate cuts.
The Japanese yen rose in Asian trade on Friday against a basket of major rivals, extending gains for the second straight session against the US dollar and moving away from a two-week trough on short-covering.
The gains are also underpinned by hot Tokyo inflation data, which showed increasing inflationary pressures on the Bank of Japan’s policymakers, boosting the odds of a rate hike in June.
The Price
The USD/JPY price rose 0.5% today to 143.43 yen per dollar, with a session-high at 144.18.
The yen rose 0.45% on Thursday against the dollar, the first profit in four sessions away from a two-week trough at 146.29.
Tokyo Inflation
Earlier data showed consumer prices in Tokyo rose 3.6% y/y in May, the fastest pace since January 2023, and up from 3.4% in April.
Following the data, the odds of a BOJ 0.25% interest rate hike in June rose from 35% to 45%.
Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.
Now traders await important Japanese data on inflation, unemployment, and wages to gather more clues.
The US dollar fell against most major rivals on Thursday after important data, while markets assess a US court ruling to suspend Trump’s tariffs.
The US International Trade Court in Manhattan ruled today that Trump overstepped his authority by imposing an economic emergency and tariffs on other countries, and ordered the administration to stop collecting tariffs.
Nvidia’s stock also rallied following its results, which showed first-quarter earnings above estimates on strong demand on data centers.
Earlier US data showed the second reading for GDP with a 0.2% contraction in the first quarter, below the 0.3% contraction in the first reading.
US unemployment claims rose by 14 thousand last week, while analysts expected an increase of 3 thousand.
On trading, the dollar index fell 0.6% as of 19:44 GMT to 99.2, with a session-high at 100.5, and a low at 99.2.
Aussie
The Australian rose 0.3% against the US dollar to 0.6447.
Loonie
The Canadian dollar rose 0.2% as of 20:20 GMT against the US dollar to 0.7244.