Gold prices rose in European trade on Friday, extending gains for a second day and trading above $2400 once more near record highs amid a new flux of haven demand after Israel attacked Iranian soil.

The precious metal is heading for the fifth weekly profit in a row even as the odds of a Fed interest rate cut in the summer declines following strong US data and bullish remarks by Fed officials. 

Prices 

Gold prices rose 1.6% to $2417 an ounce, with a session-low at $2373.

Gold prices rose 0.8% on Thursday, resuming gains and approaching record highs at $2431. 

Israel Strikes Iran

The NBC network reported that Israel executed a military strike against Iran, with Iranian media reporting explosions near the Isfahan airport. 

Multiple air courses were rerouted above Iran earlier on Friday. 

Bloomberg reported that Israel notified the US yesterday of a plan to respond militarily to Iran in the next 24 to 48 hours. 

The NBC reporting indicated the US hasn’t joined the strike. 

Iranian TV said the air defense system shot multiple drones in Isfahan early Friday.

Western reports indicated that Iranian nuclear sites weren’t aimed at by the Israeli strikes. 

The New York Times reported that Israel officially stands behind the attack on Iran today. 

Weekly Trades 

Gold prices are up 3% this week, on track for the fifth weekly profit in a row, the longest such streak of weekly gains since December 2022. 

Strong Data

Recent US retail sales data blew past estimates, indicating strong growth in the first quarter.

Such data cast doubts about the timing of the next Federal Reserve interest rate cut, especially after strong employment and consumer prices data. 

Bullish Remarks 

Fed Chair Jerome Powell said in a symposium earlier this week that inflation has stiffened and held its place during the first quarter, raising doubts about the prospects of interest rate cuts in 2024.

Powell added that it’s clear that recent inflation data didn’t give the Fed enough confidence that inflation is heading towards the target, and it could take longer than expected.

The New York Fed President said he doesn’t expect a rate hike at all, but it remains possible.  

Atlanta Fed President Raphael Bostic said he supports maintaining interest rates unchanged, and he doesn’t believe it’ll be suitable to cut interest rates until the end of the year. 

US Rates

The odds of a June Fed interest rate cut fell from 32% to 18%, while the odds of such a cut in July tumbled to 44%.

Investors now barely expect two interest rate cuts this year by the Fed, instead of the previously estimated three. 

Gold Performance Forecast

Capital.com’s analysts said the news about Israeli attacks against Iran today threaten a wide-scale conflict in the Middle East, in turn boosting gold prices. 

They said the markets remain on edge to get more information about the type and timing of the attack. 

The SPDR 

Gold holdings at the SPDR Gold Trust remained flat yesterday at 827.59 tonnes, a week low. 

Gold prices rose on Thursday as the dollar advanced against most major rivals amid mounting geopolitical tensions in the Middle East. 

Earlier US data showed unemployment claims stabilized at just 212 thousand last week.

Otherwise, IMF Director Christalina Georgiva said to Bloomberg she still sees a possibility of a Fed interest rate cut this year, however she supported the Fed’s decision to hold off rate cuts for the time being. 

Otherwise, the dollar index rose 0.2% as of 18:48 GMT to 106.1, with a session-high at 106.1, and a low at 105.7. 

Gold spot prices rose 0.4%, or $9.7 as of 18:48 GMT to $3398.1 an ounce. 

US stock indices stabilized on Thursday following strong data that showed the Fed won’t be pressured any time soon to cut interest rates.

Earlier US data showed unemployment claims stabilized at just 212 thousand last week.

Otherwise, IMF Director Christalina Georgiva said to Bloomberg she still sees a possibility of a Fed interest rate cut this year, however she supported the Fed’s decision to hold off rate cuts for the time being. 

On trading, Dow Jones rose 0.1%, or 10 points as of 17:16 GMT to 37,763, while S&P 500 fell 0.1%, or 6 points to 5016, as NASDAQ declined 0.2%, or 36 points to 15,640. 

Bitcoin gained ground on Thursday and held above the psychological level of $60,00 away from recent six-week lows amid active short-covering. 

Despite the recent correction, bitcoin has become more dominant in the cryptocurrency market as investors shun riskier currencies. 

A recent slowdown in US 10-year treasury yields also offered additional support and sentiment in favor of cryptocurrencies.

The Price 

Bitcoin rallied 2.9% at Bitstamp today, or by $1790 to $63,046, with a session-low at $60,830. 

Bitcoin lost 4% on Wednesday, the second loss in three days, plumbing six-week lows at $59,672 as Wall Street markets tumbled. 

Cryptocurrency Market Value 

The market value of cryptocurrencies rallied by $20 billion today to over $2.375 trillion as bitcoin and ethereum gained ground.

Bitcoin’s Dominance 

As AI-linked cryptocurrencies tumbled in recent weeks, bitcoin gained more dominance with market share rising to 55%. 

Bitcoin’s market share rose by 1.35% last week, and by 2.5% in March following a flux of new investments. 

Bitcoin’s Halving 

In the pre-halving period, Google interest in bitcoin surged to record highs, passing its previous halving event in 2020 by a wide margin. 

US Yields 

US 10-year treasury yields fell 0.65% away from recent five-month highs at 4.696%, underpinning non-yielding assets. 

The developments come as markets await more clues on the future of US interest rates this year. 

Bitcoin’s Forecasts

Cypto.com’s CEO expects a selloff wave for the cryptocurrency as it approaches the halving event, however, in the long term, the event is expected to make a difference and carry positive value for the cryptocurrency market.